Wells Fargo Money Market Funds' latest "Portfolio Manager Commentary" explains, "​Industry flows in May slowed markedly from the previous two months, though funds still continue to draw assets. The industry attracted a meager $​81 billion in new assets during this month, compared with $​451 billion in April and $​625 billion in March. Inflows in the prime money market funds of more than $​87 billion far outpaced those into government and Treasury money market funds, which, in a reversal from March and April, saw balances shrink by $​5.​5 billion. Since March 1, $​1.​2 trillion has flowed into money market funds, bringing industry assets to a record $​5.​12 trillion, after crossing the $​5 trillion threshold last month. Even after the relatively small (​in comparison to total asset class balances) outflows, balances in government and Treasury money market funds remained relatively flat at $​3.​9 trillion. Prime fund assets, however, set a new post-​reform record at $​1.​1 trillion after experiencing inflows in all but two trading days during the month. And finally, municipal money market funds ended the month essentially flat at $​139 billion after experiencing withdrawals of $​360 million." Wells adds, "​The big question on the minds of many money market professionals is, 'What happens now?' Do assets continue to flow into the funds? Or will we see assets flow out? In the very short term, two tax payment dates will be coming up -- the regular June 15 corporate tax payment due date and the July 15 pandemic-​extended 2019 tax payment deadline -- both of which seem to indicate that we will see some outflows from funds over the next two months. However, those flows are not likely to rise to the same level that we saw with inflows. Inflows over the past few months have come from a variety of sources: capital markets proceeds, liquidations of risk assets, liquidity raises for general corporate purposes, and proceeds from recent fiscal stimulus and safety net programs, to name a few. It seems reasonable to expect then that outflows from funds will occur gradually as we recover from recent dislocations and proceeds are deployed for general and specific economic purposes. Until we, as an industry, begin to see more clarity on the longevity of recent cash flows, we may continue to see funds carry elevated levels of liquidity to ensure cash is there to meet investor needs."

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