Tax-exempt money market funds attracted $3.60 billion of inflows in the week ended July 8, the most in six months, as retail investors responded to volatility in the long-term market. The inflow boosted total net assets to $265.98 billion, according to The Money Fund Report, a service of iMoneyNet.com.
"There has been a lot of news coverage about money coming out of bond funds recently and there may be some nervousness out there regarding their value declining in a projected rising interest-rate environment," said Mike Krasner, managing editor of iMoneyNet Inc. "We have seen in the past that retail investors -- who dominate the tax-free fund universe, but not taxable -- tend to seek shelter in MMFs at times of market uncertainty or volatility."
In the week ended July 1, $903.9 million flowed back into the industry as total net assets ended at $262.38 billion. That came on the heels of $314.7 million of outflows in the week ended June 24 when total net assets fell to $261.48 billion. The average, seven-day simple yield for the 423 tax-exempt money funds remained at 0.01%, while the average maturity increased by one day to 34 days.
Among the 1,026 taxable money funds, inflows of $11.67 billion arrived in the week ended July 9 as total net assets rose to $2.324 trillion, compared to the prior week when outflows of $2.36 billion caused total net assets to fall to $2.313 trillion.
The average, seven-day simple yield for the taxable funds was unchanged at 0.01%, while the average maturity decreased by one day to 48 days.
Overall, the combined assets of the 1,449 money funds grew by $15.27 billion -- the largest increase in weekly assets since May -- which boosted total net assets to $2.590 trillion in the week ended July 9, according to iMoneyNet data. It was also a sharp comparison to the prior week when $1.46 billion of outflows dragged total net assets to $2.575 trillion.
