​ Institutional Investors Shift to Money Funds from Direct Investments. Companies have made significant shifts in their short-​term investment portfolios since the ABCP Panic began in August. While a flight-​to-​quality has been evident, less noted has been the massive shift into money market mutual funds of all types and away from direct money market investments, particularly asset-​backed commercial paper, CP and more illiquid offerings like auction-​rate securities. Money fund assets have increased by $​418 billion, or 16%, since August 1, with over half of these gains going to "​Prime" money funds. A recent presentation, "So Much Cash, So Little Time," at a Treasury Management Association of New England (​TMANE) meeting by Greg Fortuna of State Street'​s Globallink discussed the trend. Fortuna estimated that the typical developing company has reduced its allocation to CP/​Repo from 50-​60% pre-​credit crunch to 20-​25% post-​credit crunch with almost all of the decrease moving to money market funds. State Street Global Markets'​s "​Cash Positioning" illustration shows money funds now accounting for 30-​35% of the average company'​s holdings, while demand deposit accounts (​DDA) have remained steady at 4-​7% and externally managed cash has increased from 35-​40% to 40-​45%.

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