Barron'​s writes, "Money-​Market Fund Assets Are at a Record and Poised to Keep Growing. Here’​s Why." They tell us, "Money-​market funds pulled in $​935 billion in new assets last year, pushing total assets above $​8 trillion and surpassing their haul in 2024, according to new research from Morgan Stanley. The low-​risk savings vehicles are poised to maintain steady asset growth in 2026, despite expectations for more Federal Reserve rate cuts ahead." The piece continues, "Morgan Stanley analysts anticipate money-​market funds could attract another $​500 billion in assets this year because their yields remain attractive to both retail and institutional investors. The Crane 100 Money Fund Index had an average 3.​58% annualized 7-​day yield as of Jan. 3. Some funds offer above-​average rates, such as Vanguard Federal Money Market Fund'​s 3.​70%. That is down from a high of more than 5% in 2023, but well above the near-​zero rates money funds earned for years before the Federal Reserve started raising rates in 2022." The article also says, "Morgan Stanley forecasts that assets in money-​market funds could exceed $​8.​6 trillion by the end of 2026. Money-​market fund yields have only been higher than 3% at two points over the past two decades, according to a Dec. 5 Morgan Stanley research note. 'Their high degree of safety and liquidity continue to make money-​market funds an attractive investment alternative to bank deposits,' the analysts wrote." It adds, "Flows into money-​market funds have persisted even as many investors embraced risky investments last year.... Morgan Stanley analysts estimated Dec. 5 that at the end of 2026, money-​market fund investors would earn $​275 billion in income over the previous 12 months. They believe most investors will reinvest the income in money-​market funds, rather than put it in equities."

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