Tax-exempt money market funds began the second half of the year on a sour note, suffering outflows of $10.62 billion, according to the Money Fund Report, a service of iMoneyNet.com of Westborough, Mass.

The second consecutive week of declines caused the tax-exempt funds to end the week of June 30 with $503.03 billion in total assets, down from $513.65 billion the previous week when the funds experienced outflows of $3.81 billion for the week ending June 23.

The average seven-day yield for the 549 tax-exempt funds in this week's report dropped eight basis points to 1.26% from 1.36% the prior week, while the average maturity increased to 27 days from 25.

Meanwhile, the 1,302 taxable money market funds lost $40.86 billion to settle at $2.88 billion for the week ending July 1, according to the report. By comparison, the week before taxable funds took in $11.86 billion of inflows, settling at $2.929 trillion.

The total assets of the 1,851 money market funds in the report fell by $51.47 billion and ended the week of July 1 with total assets of $3.39 trillion, compared with $8.06 billion of inflows in the previous week, causing assets to rise to $3.442 trillion.

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