Money Fund Assets Slide Again
Money fund assets have started 2015 on a downward path after rising for 4 straight months to end 2014. ICI's latest weekly "`Money Market Fund Assets," shows that assets decreased last week for the second week in a row. It says, "Total money market fund assets decreased by $9.03 billion to $2.71 trillion for the week ended Wednesday, January 14, the Investment Company Institute reported today. Among taxable money market funds, Treasury funds (including agency and repo) increased by $890 million and prime funds decreased by $7.47 billion. Tax-exempt money market funds decreased by $2.46 billion. Assets of retail money market funds decreased by $6.57 billion to $909.42 billion. Among retail funds, Treasury money market fund assets decreased by $920 million to $197.82 billion, prime money market fund assets decreased by $4.26 billion to $520.17 billion, and tax-exempt fund assets decreased by $1.39 billion to $191.44 billion. Assets of institutional money market funds decreased by $2.47 billion to $1.80 trillion. Among institutional funds, Treasury money market fund assets increased by $1.81 billion to $793.71 billion, prime money market fund assets decreased by $3.21 billion to $930.17 billion, and tax-exempt fund assets decreased by $1.07 billion to $72.00 billion." In other news, the Financial Times writes, "Record Cash Flow into EU Money Funds." The piece says, "Investors seeking to escape Europe's economic uncertainty have stashed a record amount of cash into ultraconservative investment funds in spite of many paying zero or even negative interest rates. European money market funds, which act as important sources of short-term finance for companies and banks worldwide, registered a record $27bn in net inflows so far this year, compared with the previous record of $24.3bn for the entire month of January in 2013, according to data from EPFR Global. The flows come even though the E1tn eurozone money market industry is in effect charging investors to park their cash with it.... Last year European money market funds attracted $40bn in net inflows. The decline into negative territory for money market funds followed the decision by the ECB in June to cut its deposit rate below zero -- the first central bank in the world to take such action. The ECB action had the effect of penalising banks that wanted to park their spare cash at the central bank in the hope they would use it to boost lending instead."
