Money Funds Rise, Hit Another All-Time Record
NEW YORK (AP) _ Assets of the nation’s 454 money market mutual funds rose by $2.20 billion in the latest week to a new all-time high of $284.59 billion, the Investment Company Institute said Thursday.
The rise in the seven-day period ended Wednesday followed a $4.36 billion rise the previous week, the Washington-based mutual fund trade group said. It was the second straight time a new record was reached.
The institute said that in the latest week, assets of 226 general purpose funds fell $2.9 million to $90.17 billion, assets of 91 broker-dealer funds increased $1.21 billion to $120.48 billion, and assets of 137 institutional funds rose $998.2 million to $73.93 billion.
″Assets of funds in the broker-dealer category continued to lead the way in boosting total assets of money-market funds to new record highs,″ said Jacob Dreyer, the institute’s senior vice president and chief economist.
″The typical start-of-year inflow of monies into money-market funds has been reinforced this year by an extremely favorable yields offered by these funds relative to the yields available both on competing short-term investments and on most longer-term investments,″ he said.
The seven-day average yield on money market mutual funds rose in the week ended Tuesday to 8.35 percent from 8.28 percent the previous week, according to Donoghue’s Money Fund Report, a trade journal based in Holliston, Mass.
The 30-day average yield rose to 8.30 percent from 8.22 percent, Donoghue’s said.
The average maturity of the portfolios held by money funds was 30 days, unchanged from the prior week, Donoghue’s said.
The newsletter Bank Rate Monitor said its survey of 100 leading commercial banks, savings and loan assocations and savings banks in the nation’s 10 largest markets showed the effective annual yield available on money market accounts rose to 6.26 percent as of Wednesday from 6.24 percent a week earlier.
The North Palm Beach, Fla.-based newsletter said the effective annual yield available on special savings accounts, called Super NOW accounts, dipped to 5.13 percent from 5.14 percent.
Bank Rate Monitor said the effective annual yield was 8.30 percent on six- month certificates of deposit, up from 8.26 the previous week. Yields were 8.54 percent on 1-year CDs, up from 8.51 percent; 8.65 percent on 2 1/2 -year CDs, up from 8.63 percent; and 8.77 percent on 5-year CDs, up from 8.75 percent.