The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States statistical survey (formerly the "Flow of Funds") last Friday. Among the 4 tables it includes on money market mutual funds, the Second Quarter 2019 edition shows that Total MMF Assets increased by $127 billion to $3.206 trillion in Q2. The Household Sector, by far the largest investor segment with $1.908 trillion, saw assets jump in Q2, as did the next largest segments, Nonfinancial Corporate Businesses and Other Financial Business (what we believe was formerly labelled Funding Corporations). Repos jumped and Treasuries plunged among money fund assets in Q2. (For those attending our European Money Fund Symposium, which takes place Monday and Tuesday this week, welcome to Dublin, Ireland! Watch for coverage of our event in coming days.)
The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also show slight asset increases for Property-Casualty Insurance Life Insurance Companies and the Rest of the World categories in Q2 2019. Nonfinancial Noncorporate Business, State & Local Govts and Private Pension Funds also saw assets rise slightly in Q2, and State & Local Govt Retirement MMF holdings were flat. Over the past 12 months, the Household Sector, Other Financial Business (formerly Funding Corps) and Nonfinancial Corporate Businesses showed the biggest asset increases. Every category increased in assets over the past 12 months.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $127 billion, or 4.1%, in the second quarter to $3.206 trillion. Over the year through June 30, 2019, assets were up $283 billion, or 17.4%. The largest segment, the Household sector, totals $1.908 trillion, or 59.5% of assets. The Household Sector increased by $82 billion, or 4.5%, in the quarter, after increasing $26 billion in Q1'19. Over the past 12 months through Q2'19, Household assets were up $283 billion, or 17.4%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $492 billion, or 15.3% of the total. Assets here rose by $19 billion in the quarter, or 4.1%, and they've increased by $40 billion, or 8.8%, over the past year. Other Financial Business (formerly Funding Corporations) was the third-largest investor segment with $258 billion, or 8.0% of money fund shares. They rose by $7 billion, or 2.6%, in the latest quarter. Other Financial Business has increased by $30 billion, or 13.4%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds held 5.1% of money fund assets ($163 billion), up by $1 billion (0.6%) for the quarter, and up $9 billion, or 6.1%, for the year. Nonfinancial Noncorporate Businesses, which held $110 billion (3.4%), were in 5th place. The Rest of The World category remained in sixth place in market share among investor segments with 3.2%, or $103 billion, while State and Local Government Retirement Funds held $66 billion (2.0%), Life Insurance Companies held $55 billion (1.7%), Property-Casualty Insurance held $31 billion (1.0%), and State and Local Governments held $21 billion (0.7%) according to the Fed's Z.1 breakout.
The Fed's "Flow of Funds" Table L.121 shows "Money Market Mutual Funds" largely invested in "Debt Securities," or Credit Market Instruments, with $1.799 trillion, or 56.1% of the total. Debt securities includes: Open market paper ($232 billion, or 7.2%; we assume this is CP), Treasury securities ($744 billion, or 23.2%), Agency and GSE-backed securities ($676 billion, or 21.1%), Municipal securities ($136 billion, or 4.2%), and Corporate and foreign bonds ($12 billion, or 0.4%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.133 trillion, or 35.3%) and Time and savings deposits ($259 billion, or 8.1%). Money funds also hold minor positions in Foreign deposits ($2 billion, or 0.1%), Miscellaneous assets ($10 billion, or 0.3%) and Checkable deposits and currency ($3 billion, 0.1%). Note: The Fed also lists "Variable Annuity Money Funds;" they currently total $36 billion.
During Q2, Debt Securities were down $96 billion. This subtotal included: Open Market Paper (up $15 billion), Treasury Securities (down $136 billion), Agency- and GSE-backed Securities (up $21 billion), Corporate and Foreign Bonds (up $3 billion) and Municipal Securities (up $1 billion). In the second quarter of 2019, Security Repurchase Agreements were up $153 billion, Foreign Deposits were up $1 billon, Checkable Deposits and Currency were up $35 billion, Time and Savings Deposits were up $34 billion, and Miscellaneous Assets were up $1 billion.
Over the 12 months through 6/30/19, Debt Securities were up $89B, which included Open Market Paper up $57B, Treasury Securities down $15B, Agencies up $13B, Municipal Securities (up $0), and Corporate and Foreign Bonds (up $4B). Foreign Deposits were down $1 billon, Checkable Deposits and Currency were down $12B, Time and Savings Deposits were up $82B, Securities repurchase agreements were up $224B, and Miscellaneous Assets were up $2B.
Note that the Federal Reserve changed its numbers related to money market funds substantially in the second quarter of 2018. Its "Release Highlights Second Quarter 2018" tells us, "New source data for money market funds from the U.S. Securities and Exchange Commission's (SEC) form N-MFP have been incorporated into the sector's asset holdings (tables F.121 and L.121). Money market funds not available to the public, which are included in the SEC data, are excluded from Financial Accounts' estimates. Data revisions begin 2013:Q1. Holdings of money market fund shares by households and nonprofit organizations, state and local governments, and funding corporations (tables F.206 and L.206) have been revised due to a change in methodology based on detail from the Investment Company Institute. Data revisions begin 1976:Q1."
