While it briefly appeared as if the party was ending for money market mutual fund assets, following a 3-​week, $​118 billion decline in late April, the inflows have returned with a vengeance. The latest weekly totals from ICI show money fund assets continuing their strong post-​tax-​season rebound, rising $​25.​8 billion to $​3.​498 trillion. Last week funds jumped $​54 billion and it appears likely that assets will shortly retake their record levels just above $​3.​5 trillion.

Institutional investors once again drove the inflows, with a gain of $​30.​54 billion to $​2.​265 trillion. This puts assets back to a mere $​2 billion below their pre-​April 15 record level, and pushes the institutional funds' total of all money fund assets to a record 64.​7%, almost two-​thirds of the overall total. Just decade ago, these percentages were reversed, with Retail money funds accounting for 63% of all money fund assets.

Retail money funds showed outflows of $​4.​77 billion to $​1.​233 trillion, but these assets are still up a brisk 22% ($​224 billion) over the past 52 weeks. Institutional assets, however, have increased by a massive 53.​6% since May 2007, or $​790 billion. Overall money fund assets remain up by over $​1 trillion over the trailing 52 weeks, an increase of 40.​8%. Year-​to-​date, money funds have gained $​353 billion, or 11.​2%, following their record-​breaking increases of $​763 billion (​32.​0%) in 2007.

As we'​ve said recently, we expect money fund inflows to slow from this torrid pace, though the increases should remain in the double-​digits. Even the possibility of higher short-​term interest rates later this year shouldn'​t be enough to reverse the harmonic convergence of events pushing cash into money markets.

Deutsche Bank'​s DB Advisors has become the first money market mutual fund complex to sign up for Clearwater Analytics money fund transparency initiative. DB will provide money fund portfolio holdings, initially twice monthly, and additional information to Clearwater'​s new money fund module, which will allow for flexible summary reporting and risk measurement outputs on the fund portfolios.

DB'​s Joe Sarbinowski and Kevin Bannerton tell us, "The rationale and reason is to continue to build confidence in the money fund industry. We'​ve weathered the storm, but clients are looking for more transparency and analytics, and a way to make more informed decisions around risk attributes." They add, "​We will respond to what the market needs as far as frequency," but that their client survey indicated that daily holdings would be "​overkill". Investors need to respond to auditors and investment committees, and to immediately gauge their headline risk, the two say.

Sarbinowski tells us, "It'​s not so much about the frequency or the holdings; people want to know what the information means." it has to be "​in-​depth enough that clients can feel comfortable with the investment decisions we make". He says the new tool will go above and beyond holdings, "​providing the flexibility to look at various data formats". It will provide information such as ABCP credit enhancements and liquidity support, a spectrum of maturities, and information on the financial sponsor for RFI'​s.

Regarding SIVs, which were held by over 2/​3 of money fund advisors, DB says it has no more as of its April 30 filing and didn'​t hold any problem issues or have to infuse capital to support their money market funds. "​We'​re happy that that'​s a past story for our product," says Sarbinowski. Bannerton says that the "​lack of understanding around asset classes" added to the past turmoil. "​If we can educate around risk attributes, we may prevent a knee-​jerk reaction."

"This is to try to make investors lives easier to see what is happening in the porfolio," DB says. "​There may be an acute focus now," but the need for transparency is a longer-​term trend and goes beyond money funds says Bannerton. "There will be a new standard of surveillance. Clients want to see that processes are in place to monitor risk on an ongoing basis." DB Advisors, which is the new name for Deutsche Bank'​s global institutional investment management business, says they'​re ramping up for a July 1 launch.