Money Fund Assets Plunge
Money fund assets broke a 3-week streak of big asset gains as they dropped sharply in the latest week. ICI released its latest "Money Market Fund Assets" report, which showed total money market fund assets decreased by $21.95 billion to $2.61 trillion for the week ended October 15. The release says, "Among taxable money market funds, Treasury funds (including agency and repo) decreased by $2.20 billion and prime funds decreased by $18.06 billion. Tax-exempt money market funds decreased by $1.69 billion. Assets of retail money market funds decreased by $620 million to $908.56 billion. Among retail funds, Treasury money market fund assets decreased by $330 million to $202.34 billion, prime money market fund assets decreased by $40 million to $520.96 billion, and tax-exempt fund assets decreased by $250 million to $185.25 billion. Assets of institutional money market funds decreased by $21.33 billion to $1.70 trillion. Among institutional funds, Treasury money market fund assets decreased by $1.87 billion to $755.20 billion, prime money market fund assets decreased by $18.02 billion to $874.90 billion, and tax-exempt fund assets decreased by $1.44 billion to $70.45 billion." In other news, the Financial Times wrote "Investors Pour Billions into Money Funds in “Dash for Cash." It says, "Ever since Mario Draghi introduced a negative deposit rate -- in effect charging banks who park their surplus funds at the European Central Bank -- it has been a tough time to be a money market fund manager.... But, while logic suggests return-starved investors should shun assets that offer nil, or even sub-zero, yields, MMFs now face a different conundrum: how to invest the billions flowing their way. Last week saw a record $23.46bn flow into European MMFs in spite of fears that rock-bottom ECB rates would make it harder for them to make money, according to EPFR, the data provider."
