Prime Declines Approach $500 Billion
Money fund assets jumped in the latest week, but Prime MMF assets continued their deep slide. Prime assets fell below $1 trillion for the first time in almost 20 years last week and total declines since late 2015 are now approaching $500 billion. Government MMF assets skyrocketed, increasing by twice the size of the Prime fund decline. ICI's weekly "Money Market Fund Assets" report shows all MMFs increasing $24.0 billion in the latest week. Prime funds fell $22.8 billion -- their 11th decline out of the last 12 weeks (-$213.5B). (Govt funds continue to be the recipient of these assets.) Since Oct. 29, 2015, just prior to Fidelity Cash Reserves' huge conversion, Prime assets have fallen by a massive $491.2 billion, or 33.7%. Govt MMFs have increased by $573.4 billion during this same time while Tax Exempt MMFs have fallen by $60.7 billion. YTD in 2016, Prime MMFs are down by $316.6 billion, or 24.7% while Govt MMFs are up by $366.1 billion, or 30.0%. Government fund assets moved ahead of Prime assets in February 2016 for the first time ever, and they haven't looked back. The shift was initially fueled by the conversion of over $300 billion of Prime funds into Govt funds, but since June appears to be driven by investors and investor segments shifting from Prime funds into Govt MMFs. ICI's latest weekly says, "Total money market fund assets increased by $24.03 billion to $2.74 trillion for the week ended Wednesday, August 3, the Investment Company Institute reported today. Among taxable money market funds, government funds increased by $45.70 billion and prime funds decreased by $22.82 billion. Tax-exempt money market funds increased by $1.16 billion." Government assets, including Institutional and Retail (and Treasury and Government), which broke above the $1.5 trillion level for the first time ever 2 weeks ago, stand at $1.587 trillion, while Prime assets, which dipped below the $1.0 trillion level for the first time in almost 20 years, are at $967 billion. The release explains, "Assets of retail money market funds increased by $2.59 billion to $958.40 billion. Among retail funds, government money market fund assets increased by $15.32 billion to $476.54 billion, prime money market fund assets decreased by $12.20 billion to $341.47 billion, and tax-exempt fund assets decreased by $540 million to $140.39 billion.... Assets of institutional money market funds increased by $21.44 billion to $1.78 trillion. Among institutional funds, government money market fund assets increased by $30.38 billion to $1.11 trillion, prime money market fund assets decreased by $10.63 billion to $625.70 billion, and tax-exempt fund assets increased by $1.69 billion to $44.22 billion."
