Money market fund assets rise $21.5 billion to $7.94 trillion as retail funds slip

Assets in US money market funds rose to $7.94 trillion in the week ended October 21, as institutional investors added cash and individual investors withdrew a little, according to the Investment Company Institute.

What happened

Total assets increased by $21.49 billion to $7.945 trillion, from $7.923 trillion the week before and $7.964 trillion on October 7. Among taxable funds, government funds, which invest in Treasury and agency securities, increased by $21.82 billion to $6.542 trillion. Prime funds, which can hold corporate short-term debt, increased by $3.23 billion to $1.239 trillion. Tax-exempt funds decreased by $3.56 billion to $164.05 billion.

Retail money market funds, which are sold primarily to individuals, decreased by $2.52 billion to $3.117 trillion. Within retail, government funds fell by $283 million to $1.98 trillion, prime funds rose by $776 million to $987.07 billion and tax-exempt funds fell by $3.01 billion to $147.78 billion.

Institutional funds increased by $24.01 billion to $4.828 trillion.

Context

The Federal Reserve raised the target range for its policy rate by a quarter of a percentage point to 3.75% to 4.00% on September 16, according to its statement. The Fed's policy committee next meets on October 27-28.

ICI notes that the weekly change "is primarily driven by flows and can be used as a proxy for net new cash flows." It classifies funds as retail or institutional based on language in the fund prospectus; retail funds "are sold primarily to the general public."