Money Fund Assets Plunge Again
Money fund assets fell for the third straight week, dropping $14.8 billion, according to ICI's weekly data. The Investment Company Institute's weekly "Money Market Fund Assets" report says, "Total money market fund assets decreased by $14.76 billion to $2.75 trillion for the week ended Wednesday, March 23, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $1.84 billion and prime funds decreased by $10.42 billion. Tax-exempt money market funds decreased by $6.18 billion." Government assets, including Institutional and Retail (and Treasury and Government), stand at $1.270 trillion, while Prime assets are at $1.251 trillion. Government fund assets surged ahead of Prime assets for the first time earlier in March as over $191 billion converted from Prime MMFs to Govt. Another $82 billion is scheduled to switch over the next several months. (Later this year, many expect investors to shift as much as hundreds of billions 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 $6.18 billion to $996.90 billion. Among retail funds, government money market fund assets increased by $900 million to $379.05 billion, prime money market fund assets decreased by $5.11 billion to $446.28 billion, and tax-exempt fund assets decreased by $1.97 billion to $171.57 billion." It adds, "Assets of institutional money market funds decreased by $8.58 billion to $1.75 trillion. Among institutional funds, government money market fund assets increased by $940 million to $890.90 billion, prime money market fund assets decreased by $5.31 billion to $804.73 billion, and tax-exempt fund assets decreased by $4.21 billion to $59.09 billion." Year-to-date through March 23, MMF assets are down $7 billion; month-to-date assets are down $52 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." Also, ICI released a publication, "Profile of Mutual Fund Shareholders, 2015," which looks at mutual fund ownership trends. It states, "Among households that owned mutual funds, median mutual fund holdings were $120,000. The largest percentage of mutual fund–owning households, 88 percent, owned equity funds. Thirty-five percent had invested in balanced funds, 42 percent in bond funds, and 54 percent in money market funds."
