Tax-exempt money market funds recorded their biggest inflow in more than a year as total net assets soared by $3.84 billion to $267.96 billion in the week ended Aug. 5, according to The Money Fund Report, a service of iMoneyNet.com.
It was the biggest weekly inflow since a $4.64 billion gain in the week ended July 8, 2012, and beat the previous 2013 high, set a month ago when the industry accumulated $3.60 billion in the week ended July 8 amid a barrage of outflows that has continued for most of this year.
“Tax-free assets have been building back up to where they sat prior to the April 15 tax-payment deadline,” said Mike Krasner, managing editor, iMoneyNet Inc.
Although he pointed out that tax-exempt money fund assets are still down 6.5% year to date, he said uncertainty or volatility in the stock and bond markets is causing investors to funnel money back into the tax-exempt money market industry after liquidating funds to pay their income taxes in April. “Investors are looking for a parking place until making their next moves,” he said.
The new gains followed losses of $530.4 million for the week ended July 29 when total net assets settled with $264.12 billion, and $475.3 million in the week ended July 22 when assets finished at $264.65 billion, respectively.
The average, seven-day simple yield for the 421 tax-free money funds was unchanged at 0.01%, while the average maturity increased by one day to 34 days.
The total net assets of the 1,020 taxable money funds, meanwhile, fell by $2.74 billion to $2.338 trillion in the week ended Aug. 6, which compares to the prior week when inflows of $2.6 billion boosted total net assets to $2.34 trillion.
The average, seven-day simple yield for the taxable money funds was unchanged at 0.01%, while the average maturity remained at 48 days.
Overall, the combined assets of the 1,441 money funds grew by $1.10 billion and settled at $2.606 trillion in the week ended Aug. 6. That compares to the prior week when the addition of $2.03 billion of new cash boosted total net assets to $2.605 trillion.
