The Investment Company Institute released its monthly "Trends in Mutual Fund Investing: June 2008" last night, which showed taxable money fund assets declining by $62.5 billion, or 2.1%, last month to $2.910 trillion and tax-free money fund assets declining by $6.6 billion, or 1.3%, to $496.8 billion. ICI's Month-End Portfolio Holdings of Taxable Money Market Funds table showed large increases in government agency securities, commercial paper and certificates of deposit, and large decreases in repurchase agreements, U.S. Treasury bills, corporate notes and Eurodollar CDs.
Commercial paper remains by far the largest holding in taxable money funds. MMFs held $714.4 billion in June, up $15.3 billion for the month. CP accounts for 24.6% of money fund assets, up from 23.5% the prior month but down from 31.5% a year ago. (ICI's CP totals don't break out but include ABCP, which accounts for 43.5% of the total CP market.) Repo was the second largest holding in June with $536.6 billion, down $48.8 billion from May. Repo represents 18.4% of assets, down from 19.7% in May and 19.7% a year ago.
U.S. Government agency securities rank third with $376.7 billion (12.9%), up $20.9 billion in June (from 12.0% in May). CDs rank fourth with $310.7 billion (10.7%), up $9.9 billion, while corporate notes rank fifth with $304.7 billion (10.5%), down $11.4 billion. Corporate notes have declined sharply from their year ago level of $362.1 billion, or 16.9% of assets. (Most SIV MTNs, or medium-term notes, would have appeared here a year ago.)
Single digit holdings of taxable money funds include: Treasury bills ($212.6 billion, or 7.3%); Eurodollar CDs ($144.8 billion, or 5.0%); bank notes ($96.1 billion, or 3.3%); other Treasury securities ($60.1 billion, or 2.1%); and ICI's "Other" category ($149.5 billion, or 5.1%). T-bills and other Treasury securities combined ($272.8 billion) declined $23.9 billion in June, from 10.0% to 9.4%. But they've increased by $181.7 billion over the past year, more than doubling their percentage (from 4.2% in June 2007) and almost tripling their dollar total (from $91.1 billion).
Over the past 12 months, taxable money fund assets have increased by $765.6 billion, or 35.7%. Year-to-date, taxable money fund assets have increased by $$267.7 billion, or 10.1%, while YTD tax-free money fund assets have increased by $31.7 billion, or 6.8%.
