Tax-free money market funds suffered a big exodus of cash last week as investors continue to grow disgruntled with paltry yields.
Tax-free money funds shed $2.79 billion during the week ended July 26, according to iMoneyNet.
The Investment Company Institute, which reported flows for the week ended July 28, showed tax-free money funds losing $3.12 billion, bringing assets in the funds to $343 billion.
Tax-free money funds have reported outflows of $53.7 billion this year, according to ICI, after sustaining outflows of $92.56 billion in 2009.
“There’s been a large movement of assets out of money market funds as the returns on those have gotten very, very skinny,” said Bill Huffman, co-head of Nuveen Asset Management.
The average tax-free funds yield 0.04%, according to iMoneyNet, unchanged from the previous week.
Nuveen Investments announced Thursday it was buying FAF Advisors’ products with about $25 billion under management — virtually everything except the money market funds.
All money market funds — including taxable funds — posted an inflow of $3.6 billion, bringing the total assets in the class to $2.8 trillion.
