The amount of cash parked at money-market funds climbed to a fresh record in the past week, although the pace of inflows has slowed from the recent breakneck speed.
Money-market funds have been scooping up cash recently, fueled in large part by depositors pulling their money away from US banks. Initially much of that flow was driven by more attractive rates, but concern about the steadiness of some smaller lenders helped turbocharge that within the past month.
About $49.1 billion poured into US money-market funds in the week to April 5, according to data from the Investment Company Institute. Total assets were an unprecedented $5.25 trillion versus a record $5.2 trillion in the week to March 29. Some $21.98 billion of those flows went into retail funds, while $27.09 billion moved into institutional vehicles.
Around $304 billion dollars in new cash has been placed in the funds over the preceding three weeks. That came as fears about the state of the banking system fueled risk aversion globally and spurred demand for high-quality, liquid assets. The most recent week’s total gain is the smallest increase since the week of March 8, when there was actually a very marginal net outflow.
In the week to April 5, government funds — which invest primarily in securities like Treasury bills, repurchase agreements and agency debt — saw assets rise to $4.37 trillion, a $34.8 billion increase. Prime funds, which tend to invest in higher-risk assets such as commercial paper, saw in inflow of around $8.03 billion, taking assets to $765.28 billion.
This article was provided by Bloomberg News.