Halister News

(Bloomberg) -- Federal Home Loan Banks (FHLBs) have been the biggest beneficiaries of the SEC’s money-market reforms, with govt fund assets boosting their agency holdings to $508b as of July from $158b in October 2015, Fitch strategists Winnie Lee-Cember and Greg Fayvilevich say in note.

• Of the $1.1t increase in govt money fund assets between October 2015 and July of this year, $387b (35%) was allocated to U.S. agencies and $266b (24%) to U.S. Treasuries
• As many as 82 funds have invested more than 20% of their assets in FHLBs vs 34 funds prior to reform, according to data from most recent reporting period
  • 20 funds have allocated more than half of their portfolios to FHLBs
• Money market funds also have indirect exposure to agency debt as they’ve also increased their repo holdings to $266b in July from $114b in October 2015

To contact the reporter on this story: Alexandra Harris in New York at aharris48@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Vivien Lou Chen