"Investors Flock to Money Funds" Writes Wall Street Journal's Min Zeng. Min Zeng, who recently moved to Dow Jones from covering money markets at Bloomberg, examines the factors behind the boom in money funds in today's Journal. He says, "Several factors are behind the boom. The subprime-mortgage turmoil and uncertainty about economic growth have spooked investors who are turning to the comfort of safe and liquid assets. Money funds, which are required to invest in assets that mature in 13 months or less, fit those safe-harbor needs." Zeng continues, "Yields on money funds have also declined less than yields on their main competitors, such as Treasury bills and commercial paper, which have tumbled following aggressive rate cuts by the Federal Reserve. This lagging effect benefits investors who get better returns, while still enjoying the diversification money funds offer." Finally, the piece quotes Peter Crane predicting 20% growth in 2008, and quotes portfolio managers from Payden Cash Reserves and T. Rowe Price Prime Reserves on safety and inflows.

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