Assets in US money market funds rose to the highest level in nearly nine years as investors poured more cash into low-risk investments amid uncertainties about global trade and economic growth, private data released on Wednesday showed. Money market funds recorded $21.38 billion in inflows to $3.040 trillion in the week ended February 12. That was the highest level since the week of March 9, 2010, when assets totaled $3.067 trillion, according to data firm iMoneyNet.
Taxable money fund assets grew by $23.82 billion to $2.902 trillion in the latest week, which was partly offset by a $2.44 billion decline in tax-free fund assets to $138.75 billion. Much of the week's asset increase stemmed from a $16.41 billion increase in cash going into funds that invest only in Treasury bills and other government-related securities for institutional investors, iMoneyNet said.
Prime fund assets, which can invest in corporate debt in addition to government paper, grew by $10.58 billion in the latest week. The growth in prime fund assets has enticed companies to issue more commercial paper as a funding source, resulting in lower borrowing costs for banks and Wall Street, analysts said.
The yields on taxable money funds fell from the week before but were well above year-ago levels. Taxable funds' simple seven-day yields averaged 2.04 percent, down from 2.06 percent a week ago but up from 0.99 percent a year earlier, iMoneyNet data showed. Tax-free funds' simple seven-day yields averaged 1.10 percent, up from 1.04 percent last week and 0.55 percent a year ago.
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