Barron's: Best Money-Market Funds
Barron's writes on "The Best Money-Market Funds." The piece says, "One investment class that has seen big inflows this year is also one of the humblest: money-market funds. Often used by investors as a place to get a higher yield on their cash than basic bank savings accounts, these highly liquid mutual funds seek to maitnain a stable net asset value and pay dividends that reflect short-term interest rates. Many now yield 5% or more, reflecting the current 5.25-5.5% federal-funds target, following the Federal Reserve's 11 interest-rate hikes over the past year. Money-market funds have received $632 billion in net inflows this year, putting net assets at $5.5 trillion, according to LSEG Lipper. That's up $1 trillion from 2022's year-end data and nearly double 2018's levels." They quote Judith Raneri, senior portfolio manager of Gabelli U.S. Treasury Money Market Fund, "I'm happy that money-market funds are finally getting their day in the sun. Money-market funds have definitely benefited from [the Fed's] pivot." The article explains, "With investors piling into these funds, Barron's surveyed the retail money-market fund landscape to see which funds are sporting the highest yields -- and to dig into how these funds operate to remind investors what they're buying. They are highly regulated to keep assets stable, but they do still carry a modicum of risk.... Over the years, the SEC has tried to strengthen these products. Recently, it passed reforms requiring that issuers maintain at least 25% of a fund's total assets in daily liquid assets and at least 50% of a fund's total assets in weekly liquid assets." Barron's adds, "Many portfolio managers say their liquidity levels are well above SEC requirements and publish these levels on their websites. Laurie Brignac, Invesco's chief investment officer and head of its global liquidity team, manages Invesco Premier Portfolio (IPPXX) and Invesco Government Money Market (INAXX). She says the funds publish full holdings weekly, along with daily and weekly liquidity, yields, and portfolio structure, offering more transparency than seen in other investment products."
