J.​P. Morgan Short-​Term Fixed Income'​s "August MMF Holdings Update" says, "Taxable money fund AUM increased $​32bn in August. Prime and Treasury funds grew $​30bn and $​6bn, respectively, while government/​agency funds fell $​4bn. The growth in prime funds was split between retail and institutional funds. YTD, taxable MMF balances have increased by $​34bn. Relative to normal seasonal patterns, current AUMs are about $​75bn higher than what has been typical in recent years.... The higher than expected inflows this year have continued to be driven by prime funds across both the institutional and retail sectors.... We suspect the source of the institutional inflows has been tax-​repatriation related as corporations repatriate cash in offshore prime funds to onshore prime funds, while retails flows have a function of higher MMF yields relative to deposits. In contrast, government funds have performed largely in line with years past." It adds, "MMFs have been active buyers of SOFR-​linked floaters issued in recent weeks.... Of the $​6.​6bn SOFR-​linked FRNs issued by Fannie Mae, Credit Suisse, and Sheffield, MMFs held $​4.​5bn or 68% at the end of August. The deals saw participation from a diverse set of funds across 14 different fund families, most of which are unrated by S&​P. As of the end of August, only a couple of S&​P-​rated MMFs held SOFR-​linked FRNs.... Government MMFs saw Treasury FRN holdings increase $​15bn, while Treasury coupons dropped $​11bn. Overall holdings of T-​bills were roughly flat, with a $​15bn increase among government/​agency fund offset by a $​16bn decline in Treasury funds. Agency and repo holdings fell $​19bn and $​28bn, respectively."

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