The Investment Company Institute released its latest monthly "Trends in Mutual Fund Investing" and its latest "Month-End Portfolio Holdings of Taxable Money Funds" yesterday. The first report confirms that money fund assets increased, while the second verifies a jump in Treasuries and Agencies, and a drop in Repo, in July. (See our August 10 News, "August Money Fund Portfolio Holdings: Repo Down, Treas, Agencies Up.") We review these releases below, and we also look at the latest asset totals for August.
ICI's latest "Trends in Mutual Fund Investing - July 2017" shows a $13.6 billion increase in money market fund assets in July to $2.647 trillion. The increase follows a $20.9 billion decrease in June, a $12.6 billion increase in May, a $24.0 billion decrease in April, a $17.7 billion decrease in March, a $0.4 billion dollar increase in February, and a $46.6 billion increase in January. In the 12 months through July 31, money fund assets were down $60.0 billion, or -2.2%.
The monthly report states, "The combined assets of the nation's mutual funds increased by $278.52 billion, or 1.6 percent, to $17.71 trillion in July, according to the Investment Company Institute's official survey of the mutual fund industry. In the survey, mutual fund companies report actual assets, sales, and redemptions to ICI."
It explains, "Bond funds had an inflow of $20.38 billion in July, compared with an inflow of $19.92 billion in June.... Money market funds had an inflow of $12.74 billion in July, compared with an outflow of $22.24 billion in June. In July funds offered primarily to institutions had an inflow of $9.34 billion and funds offered primarily to individuals had an inflow of $3.40 billion."
The latest "Trends" shows that both Taxable MMFs and Tax-Exempt MMFs gained assets last month. Taxable MMFs increased by $11.9 billion in July, after decreasing $20.3 billion in June, increasing $11.3 billion in May, decreasing $21.9 billion in April and $17.5 billion in March, increasing $0.8 billion in February, and decreasing $46.8 billion in January. Tax-Exempt MMFs increased $1.7 billion in July, after decreasing $0.6 billion in June, increasing $1.5 billion in May, decreasing $2.2 billion in April, $0.3 billion in March, and $0.3 billion in February. Over the past year through 7/31/17, Taxable MMF assets decreased by $7.5 billion while Tax-Exempt funds fell by $52.5 billion.
Money funds now represent 14.9% (down from 15.1% last month) of all mutual fund assets, while bond funds represent 22.2%, according to ICI. The total number of money market funds decreased by 5 to 412 in July, down from 433 a year ago. (Taxable money funds fell by one to 316 and Tax-exempt money funds fell by 4 to 96 over the last month.)
ICI's Portfolio Holdings showed a rebound in Treasuries, a jump in Agencies and a decline in Repo in July. Repo remained the largest portfolio segment, down $36.2 billion, or 4.0%, to $857.9 billion or 34.1% of holdings. Repo has increased by $224.1 billion over the past 12 months, or 35.4%. Treasury Bills & Securities remained in second place among composition segments; they grew by $35.0 billion, or 5.6%, to $659.4 billion, or 26.2% of holdings. Treasury holdings rose by $119.9 billion, or 22.2%, over the past year. U.S. Government Agency Securities remained in third place; they rose by $32.6 billion, or 5.1% to $675.5 billion or 26.8% of holdings. Govt Agency holdings rose by $89.1 billion, or 15.2%, over the past 12 months.
Certificates of Deposit (CDs) stood in fourth place; they increased $12.5 billion, or 7.1%, to $189.1 billion (7.5% of assets). CDs held by money funds fell by $240.2 billion, or -56.0%, over 12 months. Commercial Paper remained in fifth place but increased $3.0B, or 2.4%, to $127.5 billion (5.1% of assets). CP has plummeted by $114.6 billion, or -47.3%, over one year. Notes (including Corporate and Bank) were up by $854 million, or 12.1%, to $7.9 billion (0.3% of assets), and Other holdings declined to $12.1 billion.
The Number of Accounts Outstanding in ICI's series for taxable money funds increased by 327.2 thousand to 26.087 million, while the Number of Funds declined by one to 316. Over the past 12 months, the number of accounts rose by 2.320 million and the number of funds declined by 5. The Average Maturity of Portfolios was 32 days in July, down one day from June. Over the past 12 months, WAMs of Taxable money funds have shortened by 2 days.
Month-to-date in August through 8/29/17, our Money Fund Intelligence Daily shows total assets up by $62.7 billion, with Prime MMFs are up by $16.3 billion. Assets appear poised to break into positive territory year-to-date, though the big jumps in late July and most of August appear to be subsiding. Over the past week, money fund assets have declined by $18.1 billion, though Prime MMFs remain slightly positive.
