Money-market fund assets rose to an all-time high for the second-straight week as interest rates north of 5% and volatility in fixed-income markets drove investors to havens.
About $21.9 billion flowed into U.S. money-market funds in the week through Nov. 15, according to Investment Company Institute data. Total assets increased to $5.73 trillion from $5.71 trillion the week prior.
Investors have piled into money funds ever since last year, when the Federal Reserve began one of the most-aggressive tightening cycles in decades. Fund managers have been quicker to pass on the benefits of higher rates than banks.
Earlier this month, officials kept their main policy rate unchanged between 5.25% and 5.5%, the highest in 22 years. The chances of more Fed interest-rate increases seem to be getting increasingly remote after better-than-expected inflation data, even as policymakers leave the door open for additional hikes.
In a breakdown for the week to Nov. 15, government funds—which invest primarily in securities like Treasury bills, repurchase agreements and agency debt—saw assets rise to $4.68 trillion, an $18.9 billion increase. Prime funds, which tend to invest in higher-risk assets such as commercial paper, meanwhile, saw assets climb to $932 billion, a $5.6 billion increase.
This article was provided by Bloomberg News.