Bloomberg writes, "Money Fund Assets Rise to Record $8.27 Trillion in Dash for Cash." The piece explains, "Investors are rushing into US money-market funds, lifting total assets to a record $8.271 trillion, as the war in Iran fuels a broad flight to safety. Some $49 billion flowed into money-market funds in the week ending March 3, according to the latest figures from Crane Data LLC. About $18.5 billion alone came in on Tuesday as the effects of the US-Israeli strikes on Iran reverberated across markets. The latest funds boosted this year's inflows to more than $162 billion." (Note: Register ASAP for our upcoming Bond Fund Symposium, Crane Data's ultra-short bond fund conference. BFS will take place in just 2 weeks -- March 19-20 in Boston. We hope to see you there!)
They quote TD Securities Strategist Jan Nevruzi, "There definitely was dash to cash," noting the decline in US Treasury yields in recent weeks. "Let's see a few more days of flows." Bloomberg says, "The fast‑moving conflict across the Middle East is heightening investor anxiety and strengthening the case for haven assets, especially cash."
Deborah Cunningham, Federated Hermes' CIO for Global Liquidity, tells Bloomberg, "`Let's not forget the uncertainty pervading the Fed's future, the US economy and geopolitics -- a collective negative vibe that often sends investors to safer harbors."
The article explains, "Inflows into money markets had been expected to continue in 2026 with the Federal Reserve keeping interest rates on hold for now and amid higher tax refunds during the US filing season. However, the pace was expected to slow after the Fed's interest-rate cuts last year which are reflected with a lag in money markets. Corporate treasurers also often prefer to rotate from direct securities into cash products in order to capture yield rather than grapple with it themselves."
It adds, "Tax refunds are running about 10% higher this year, according to Deutsche Bank, boosting inflows. Taxpayers that are expecting refunds tend to file earlier and the cash that is received circulates back into money-market funds. Outflows don't typically surface until March and April as those who owe money to the government wait to file closer to the April 15 deadline."
In other news, a website named Wealth Briefing published, "UK Squeeze On Retail Savings Highlights Money Market Funds' Appeal – Aviva Investors." They comment, "When the UK finance minister, aka Chancellor of the Exchequer, Rachel Reeves, squeezed the tax allowances for retail cash savings accounts last year, it forced some wealth managers to rethink how cash is put to work. Such a move puts money market funds -- still a relatively nascent sector in the UK compared with places such as the US -- in a potentially favourable spotlight."
The piece says, "Alastair Sewell, senior investment strategist at Aviva Investors, said Reeves' tightening of allowances on cash ISAs may be a teachable moment. Reeves cut the annual cash ISA allowance from £20,000 ($26,705) to £12,000, starting from April 2027. 'In the UK, money market funds remain underutilised. Bank deposits often pay rates below the Bank of England base rate and cash benchmarks,' Sewell told WealthBriefing in a recent call. 'This environment could trigger a broader re-think of money market funds in the UK.'"
It tells us, "The UK will have some way to go to get even near the US money market sphere -- the latter hit a total of $8.0 trillion in December 2025, a record (source: Crane Data). In the UK, such funds hold about £50 billion. US money market funds have held stable as a share of overall US mutual fund assets for years -- accounting for 17 percent of total mutual fund assets, versus only 3 percent in the UK."
The article adds, "Money market funds typically provide yields materially above the average bank deposit rates. They target a yield in line with short-term reference rates such as SONIA (Sterling Overnight Index Average) -– the replacement for the old LIBOR interbank measure.... One driver and hope for more growth is among younger investors; they have fewer preconceived ideas about what MMFs are and can do, Sewell said. 'We might see a broad generational shift in attitudes towards wealth and investing.'"
Finally, the piece says, "The UK's Financial Conduct Authority has been reviewing how money market funds operate, mindful of potential worries about liquidity strains.... Sewell noted that US dollar-denominated MMFs suffered more stress during that episode than was the case with other currencies. He added that the Aviva Investors Sterling Liquidity Fund yielded 4.00 per cent gross as of 22 January 2026 vs SONIA at 3.73 percent."
