WSJ on "Back Into Prime"
The Wall Street Journal writes "Investors Tiptoed Back Into Prime Money-Market Funds, Then Left." It explains, "Investors put money back into prime money-market funds in the first three weeks of November, putting them on track for their first monthly inflow since February, but the final week of the month may have dashed those hopes. Investors put $353 million into prime money-market funds last month through Nov. 29, according to data provider iMoneyNet, stanching a yearlong hemorrhage. The additions held the promise of a turning point for prime funds that shed more than two-thirds of their assets over the past year, traders and analysts said, as the industry raced to adjust to new money-fund rules. The funds benefited from three consecutive inflows in the three weeks ended Nov. 22." The Journal says, "But money-fund tracker Crane Data showed a $1.4 billion decline in the final days of November, as money flowed out of institutional prime funds. The iMoneyNet data for the full period of November will not be released until next week. Prime money funds now hold about $375 billion, and the funds that survived are now offering higher yields than comparable short-term investments in funds dedicated to government debt, in a shift that analysts say may lead to further gains." Finally, it adds, "All told, investors have withdrawn $1.1 trillion from prime money funds since the last week of October 2015, according to Peter Crane, president of Crane Data. That was just before Fidelity Investments converted its $115 billion Cash Reserves fund, the world's largest money-market fund, to focusing on government debt."
