MMF Assets Dip, Remain Above $2.8T
Money fund assets decreased for the first time in 5 weeks, but remained above the $2.8 trillion level in the week ended Wednesday. The Investment Company Institute's weekly "Money Market Fund Assets statistics also show that Prime fund totals climbed back ahead of Government MMFs. (Two weeks ago, Government MMF assets surpassed Prime last week for the first time ever.) The report says, "Total money market fund assets decreased by $1.21 billion to $2.80 trillion for the week ended Wednesday, March 9, the Investment Company Institute reported today. Among taxable money market funds, government funds decreased by $6.26 billion and prime funds increased by $7.15 billion. Tax-exempt money market funds decreased by $2.10 billion." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.280 trillion, while Prime assets are at $1.284 trillion. Since November, over $172 billion has converted from Prime MMFs to Govt, and another $100 billion is scheduled to switch over the next several months. (Later this year, many expect investors to shift several hundred billion more in assets from Prime to Government funds as the October 14 deadline for the SEC's floating NAV, and emergency gates and fees, reforms approach. ICI's weekly release explains, "Assets of retail money market funds decreased by $3.43 billion to $1.01 trillion. Among retail funds, government money market fund assets increased by $120 million to $376.43 billion, prime money market fund assets decreased by $2.01 billion to $459.86 billion, and tax-exempt fund assets decreased by $1.54 billion to $174.17 billion." It adds, "Assets of institutional money market funds increased by $2.23 billion to $1.79 trillion. Among institutional funds, government money market fund assets decreased by $6.38 billion to $903.68 billion, prime money market fund assets increased by $9.17 billion to $823.92 billion, and tax-exempt fund assets decreased by $560 million to $64.56 billion." Year-to-date through March 9, MMF assets are up $44 billion. A Footnote to ICI's release adds, "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." In other news, Bloomberg wrote, "Nomura Undecided on Shutting Money-Market Fund as Yields Tumble." It says, "Nomura Holdings Inc. said it hasn't made a decision to close its money-market fund, following a report it was among Japanese asset managers returning cash to investors amid a plunge in yields. All 11 of the country's managers running such funds plan to shut them rather than risk their value falling below par following pressure from the Bank of Japan's negative interest-rate policy, the Nikkei newspaper reported. Nomura Asset Management Co. plans to repay investors in August and Daiwa Asset Management Co. will do so in October, Nikkei said."
