The cash parked at money-market funds climbed to a fresh all-time as investors piled into assets offering relatively higher returns.
With the Federal Reserve raising their main policy rate after the most aggressive hiking cycle in decades, short-term rates above 5% continue to lure investors to money-market assets.
About $28.4 billion poured into US money-market funds in the week to July 26, according to data from the Investment Company Institute. Total assets reached an unprecedented $5.49 trillion versus $5.46 trillion in the week to July 19.
The week before, about $4.22 billion in net new money flowed into the funds.
Money-market funds have started to extend the weighted-average maturity of their assets, or WAMs. Until recently, they had been apprehensive about allocating their record amount of assets too far out the curve in the event of being unable to immediately take advantage of central bank rate hikes.
In a breakdown for the week to July 26, government funds, which invest primarily in securities like Treasury bills, repurchase agreements and agency debt saw assets rise to $4.52 trillion, a $26.9 billion increase. Prime funds, which tend to invest in higher-risk assets such as commercial paper, saw assets jump to $854 billion, a $3.46 billion increase.
This article was provided by Bloomberg News.