US money fund assets hit highest since March 2010

18 Feb, 2019

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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