The Federal Reserve released its latest quarterly "Z.1 Financial Accounts of the United States" statistical survey (a.k.a. "Flow of Funds") Thursday. Among the 4 tables it includes on money market mutual funds, the Second Quarter 2021 edition shows that Total MMF Assets increased by $39 billion to $4.539 trillion in Q2'21. The Household Sector, by far the largest investor segment with $2.773 trillion, saw assets increase again in Q2. The second largest segment, Nonfinancial Corporate Businesses, experienced another drop in assets. The Fed's latest Z.1 numbers, which contain one of the few looks at money fund investor segments available, also shows an asset decrease in MMF holdings for the Property-Casualty Insurance category in Q2 2021.
Other Financial Business (formerly Funding Corps), Private Pension Funds, Life Insurance Companies and the Rest of the World category all saw small asset increases in Q2. The Nonfinancial Corporate Businesses and State&Local Governments sectors remained unchanged. Over the past 12 months, the Household Sector and Private Pension Fund categories showed the biggest asset increases, while Nonfinancial Corporate Businesses saw the biggest asset decrease.
The Fed's "Table L.206," "Money Market Mutual Fund Shares," shows that total assets increased by $39 billion, or 0.9%, in the second quarter to $4.539 trillion. The largest segment, the Household sector, totals $2.773 trillion, or 61.1% of assets. The Household Sector rose by $44 billion, or 1.6%, in the quarter. Over the past 12 months through Q2'21, Household assets were up $83 billion, or 3.1%.
Nonfinancial Corporate Businesses, the second-largest segment according to the Fed's data series, held $610 billion, or 13.4% of the total. Assets here fell by $19 billion in the quarter, or -3.0%, and they've decreased by $259 billion, or -29.8%, over the past year. Other Financial Business was the third-largest investor segment with $508 billion, or 11.2% of money fund shares. They rose by $7 billion, or 1.4%, in the latest quarter. Other Financial Business has increased by $28 billion, or 5.8%, over the previous 12 months.
The fourth-largest segment, Private Pension Funds, held $232 billion (5.1%). The Rest of the World, was the 5th largest category with 2.9% of money fund assets ($133 billion); it was up by $1 billion (0.9%) for the quarter but down $3 billion, or -2.1% over the last 12 months. The Nonfinancial Noncorporate Business remained sixth place in market share among investor segments with 2.7%, or $121 billion, while Life Insurance Companies held $67 billion (1.5%), Property-Casualty Insurance held $33 billion (0.7%), State and Local Governments held $36 billion (0.8%), and State and Local Government Retirement Funds held $29 billion (0.6%), 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 $2.865 trillion, or 63.1% of the total. Debt securities includes: Open market paper ($147 billion, or 3.2%; we assume this is CP), Treasury securities ($2.107 trillion, or 46.4%), Agency and GSE-backed securities ($499 billion, or 11.0%), Municipal securities ($99 billion, or 2.2%) and Corporate and foreign bonds ($12 billion, or 0.3%).
Other large holdings positions in the Fed's series include Security repurchase agreements ($1.586 trillion, or 34.9% of total assets) and Time and savings deposits ($149 billion, or 3.3%). Money funds also hold minor positions in Miscellaneous assets ($11 billion, or 0.2%), Foreign deposits ($0 billion, 0.0%) and Checkable deposits and currency (-$71 billion, -1.6%). Note: The Fed also lists "Variable Annuity Money Funds," which currently total $37 billion.
During Q1, Debt Securities were down $370 billion. This subtotal included: Open Market Paper (down $36 billion), Treasury Securities (down $255 billion), Agency- and GSE-backed Securities (down $73 billion), Corporate and Foreign Bonds (up $12 billion) and Municipal Securities (down $5 billion). In the second quarter of 2021, Security Repurchase Agreements were up $530 billion, Foreign Deposits were down $2 billion, Checkable Deposits and Currency were down $18 billion, Time and Savings Deposits were down by $36 billion, and Miscellaneous Assets were down $66 billion.
Over the 12 months through 6/30/21, Debt Securities were down $680 billion, which included Open Market Paper (down $72B), Treasury Securities (down $243B), Agencies (down $327B), Municipal Securities (down $37), and Corporate and Foreign Bonds (down $1B). Foreign Deposits were down $2B, Checkable Deposits and Currency were down $26B, Time and Savings Deposits were down $67B, Securities repurchase agreements were up $680B and Miscellaneous Assets were down $97B.
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."
