Money market mutual fund assets rose for the fifth straight week, increasing $55.3 billion, or 2.1% since the week ended Nov. 2. ICI's latest weekly release says, "Total money market mutual fund assets increased by $25.26 billion to $2.678 trillion for the week ended Wednesday, December 7, the Investment Company Institute reported today. Year-to-date, money fund assets have cut their losses to $133 billion, or -4.7%. While the lion's share of asset increases since the start of November have gone into Government funds (including Treasuries), which have jumped by $46.8 billion, Prime funds have also seen increased lately (up $6.5 billion).
ICI's report says, "Taxable government funds increased by $7.51 billion, taxable non-government funds increased by $11.61 billion, and tax-exempt funds increased by $6.13 billion. Assets of retail money market funds increased by $5.94 billion to $936.54 billion.... Assets of institutional money market funds increased by $19.31 billion to $1.741 trillion. Among institutional funds, taxable government [prime] money market fund assets increased by $6.53 billion to $743.86 billion, taxable non-government money market fund assets increased by $9.20 billion to $901.16 billion, and tax-exempt fund assets increased by $3.58 billion to $96.16 billion."
In other news, J.P. Morgan Securities LLC released an "Update on prime money fund holdings for November 2011 yesterday afternoon. Analysts Alex Roever, Teresa Ho and Chong Sin write, "In November, prime money market funds saw the first month of net inflows since April. Prime funds gained $4bn of assets in November after experiencing about $210bn in outflows between May and October. Exposures to global bank credit across CP/CD, ABCP, repo, and other notes increased by $28bn month-over-month to $1.05tn. CP/CD and ABCP exposures declined by a combined $26bn which was offset by an increase of $55bn across repo and other notes, the majority of which are time deposits but also include floating rate notes, medium-term notes, and other short-term notes."
They continue, "Despite increased exposure to global bank credit, prime funds continued to trim exposure to Eurozone banks to the tune of $35bn, $25bn of which came off in CP/CD. Practically all of the reduction came from reductions in French bank credits with CP/CD exposures declining by $30bn, ABCP by $6bn, and repo and other notes declining by $5bn. Total French bank credit exposures stood at $44bn at the end of November. Dutch banks also saw slight declines across CP/CD and ABCP by $4bn, which was offset by increases in repo and other notes." Crane Data will publish its cut of November 30 Money Fund Portfolio Holdings early next week. We expect our data to also show a continued gradual decline in European holdings too.
Bloomberg also reports that "U.S. Money Funds Cut French Bank Debt by 68%." They write, "The eight largest prime U.S. money-market mutual funds cut holdings in French banks by 68 percent in November, shifting investments to Swiss, Swedish, Canadian and Japanese banks. French bank holdings declined by $11.7 billion to $5.56 billion, according to an analysis of fund disclosures by the Bloomberg Risk newsletter. The eight funds have reduced French bank debt by $76.8 billion in the past 12 months."
Finally, we'd like to encourage anyone planning on attending our Crane's Money Fund University (www.moneyfunduniversity.com), our "basic training" on money market mutual funds, to make hotel reservations soon. Money Fund University is being held January 19-20, 2012, at The Hyatt Regency Boston and will feature training on money fund basics, Rule 2a-7, money market securities, and more. The discounted conference rate of $189 plus tax (currently 14.45%) is available through December 16th. To make reservations by phone please call: 1-888-421-1442. (Please reference "Crane's Money Fund University" in order to receive the discounted conference rate.) To make reservations online please click on this link.
