What a Difference a Year Makes—Prime Money Market Funds’ Holdings Update

By Emily Gallagher and Chris Plantier

June 14, 2012

As the eurozone debt crisis began to intensify last summer, prime money market funds took steps to gradually reduce their overall holdings of eurozone issuers. In May 2011, securities of eurozone issuers accounted for 31.1 percent of assets of U.S. prime money market funds (chart). Since then, the share of eurozone holdings declined to a trough of 12.0 percent in December 2011 and has remained low. As of May 2012, this share stands at 15.5 percent, with over 96 percent of these eurozone holdings in German, French, and the Dutch issuers (table). The tiny remaining holdings of Spain and Italy are virtually all asset-backed securities issued by U.S. or UK subsidiaries, and as such depend more on U.S. or UK economic fundamentals. At the end of May 2012, these "Spanish" and "Italian" holdings were $925 million and $103 million, respectively.

Note: Data exclude prime money market funds not registered under the Securities Act of 1933.

Source: Investment Company Institute tabulation of data provided by Crane Data

Prime Money Market Funds’ Holdings by Home Country of Issuer

May 31, 2012

Country Billions of dollars Percentage of total assets
World Total $1,392.8 100%
Europe 476.6 34.2
Eurozone 215.5 15.5
France 69.4 5.0
Germany 75.7 5.4
Netherlands 63.4 4.5
Belgium 1.8 0.1
Austria 3.9 0.3
Spain 0.9 0.1
Luxembourg 0.3 0.0
Italy 0.1 0.0
Non-eurozone 261.1 18.7
UK 114.5 8.2
Sweden 61.6 4.4
Switzerland 66.6 4.8
Norway 15.7 1.1
Denmark 2.7 0.2
Americas 661.6 47.5
USA 510.7 36.7
Canada 150.2 10.8
Chile 0.6 0.0
Venezuela 0.1 0.0
Asia and Pacific 249.6 17.9
Japan 134.3 9.6
AUS/NZ 107.0 7.7
Singapore 6.9 0.5
India 0.6 0.0
China 0.8 0.1
Korea 0.0 0.0
Malaysia 0.0 0.0
Supranational 1.3 0.1
Unclassified 3.4 0.2

Note: Calculations are based on a sample of 115 funds, representing an estimated 97.3 percent of prime funds' assets.

Source: Investment Company Institute tabulation of data provided by Crane Data

For more on money market funds, please visit ICI’s Money Market Funds Resource Center.

Emily Gallagher is an ICI Research Associate and Chris Plantier is an ICI Senior Economist.