The latest monthly "Trends in Mutual Fund Investing: July 2010," released by the Investment Company Institute late yesterday, shows money fund assets basically flat in July following a modest outflow in June. ICI's separate (and non-public) "Month-End Portfolio Holdings of Taxable Money Market Funds shows money funds increasing Repurchase Agreement holdings while decreasing U.S. Government Agency Securities and U.S. Treasury Bills in July.
ICI's first release says, "The combined assets of the nation's mutual funds increased by $415.3 billion, or 4.0 percent, to $10.916 trillion in July, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI.... Money market funds had an outflow of $6.40 billion in July, compared with an outflow of $24.08 billion in June. Funds offered primarily to institutions had an inflow of $1.56 billion. Funds offered primarily to individuals had an outflow of $7.97 billion."
The monthly survey contains an added "Analysis from ICI Chief Economist Brian Reid," which says, "Our report ... for July shows a continuation of several trends in bond and stock mutual funds -- activity that has attracted a great deal of attention and commentary in the media and online in recent weeks.... The July data continues some general trends: Outflows from money market funds: From January through July 2010, $515.6 billion flowed out of money market funds. This is primarily related to the current low yields on those funds.... [And] continued strong inflows to bond funds: Bond funds attracted net new cash flow of $185.6 billion from January through July."
Reid adds, "[L]ow short-term interest rates and the relatively steep yield curve likely are enticing some investors, both institutional and retail, to shift out of money market funds -- whose yields are hovering just above zero. Some retail investors may be moving assets into bond mutual funds." ICI also shows "Liquid Assets of Stock Mutual Funds" returned to a near-record low of 3.4%.
ICI's separate monthly Composition totals showed Repo holdings rising $73.2 billion in July to $546.0 billion (22.1%). Certificates of Deposit, the second largest holding at 21.7%, rebounded by $12.4 billion to $535.7 billion, but third-ranked Government Agency holdings plunged by $42.1 billion to $418.1 billion (17.0%). Commercial Paper increased by $5.7 billion to $400.1 billion (16.2%), but Treasury Security holdings plunged by $42.3 billion to $316.7 billion (12.8%). Notes (including Corporate and Bank) fell by $11.0 billion to $160.8 billion (6.5%), and Other investments fell by $1.4 billion to $75.9 billion.
Note: For more recent figures on money fund assets and portfolio composition, see Crane Data's subscription products, Money Fund Intelligence Daily and Money Fund Intelligence XLS.
