ICI: MMF Assets Up $11 Billion
ICI's latest "Money Market Fund Assets" shows assets rising in the week following the Federal Reserve's first interest rate hike in almost 10 years. (Money fund yields, as measured by our Crane 100 Money Fund Index, have increased from 0.06% to 0.11% over the past 7 days according to Money Fund Intelligence Daily.) The release says, "Total money market fund assets increased by $11.00 billion to $2.74 trillion for the six-day period ended Tuesday, December 22, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $3.23 billion and prime funds increased by $6.43 billion. Tax-exempt money market funds increased by $1.34 billion." The weekly update continues, "Assets of retail money market funds increased by $5.75 billion to $933.93 billion. Among retail funds, government money market fund assets increased by $2.11 billion to $343.84 billion, prime money market fund assets increased by $2.16 billion to $406.16 billion, and tax-exempt fund assets increased by $1.48 billion to $183.94 billion. Assets of institutional money market funds increased by $5.25 billion to $1.81 trillion. Among institutional funds, government money market fund assets increased by $1.12 billion to $876.25 billion, prime money market fund assets increased by $4.28 billion to $862.78 billion, and tax-exempt fund assets decreased by $140 million to $70.01 billion." ICI also notes, "In anticipation of the Securities and Exchange Commission's (SEC) new money market fund regulations, many advisers are changing their prime money market funds into government money market funds. As a result, there have been, and will continue to be, large shifts in assets from prime funds to government funds before the October 2016 deadline." (Though it appears none of these occurred this week.) Year to date, MMF assets are up $10 billion, which should make 2015 the 4th year in a row where MMFs have increased fractionally. Institutional assets are down $13 billion, or 0.7%, while Retail assets are up $23 billion, or 2.5%, YTD. (Note too that $30 billion in Vanguard assets were reclassified from Institutional to Retail last week.) Month-to-date (from 11/26), assets are up $19 billion. In other news, Reuters reports, "U.S. Fed awards $178.33 bln reverse repos." It says, "The Federal Reserve on Wednesday awarded $178.33 billion of one-day fixed-rate reverse repurchase agreements to 63 bidders at an interest rate of 0.25 percent, the New York Fed said on its website. The reverse repurchase agreement program is seen as a critical policy tool for the Fed to drain money from the financial system in an effort to achieve its interest rate objectives. On Tuesday, the Fed allotted $185.35 billion in one-day reverse repos to 60 bidders, including Wall Street dealers, money market mutual funds and mortgage finance agencies, also at an interest rate of 0.25 percent. Tuesday's amount was the most since Oct. 30 when the U.S. central bank awarded $225.3 billion to 79 bidders at an interest rate of 0.05 percent."
