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Assets of money market funds drop USD3.15 billion - Investment Company Institute

November 15
1:31 AM 2013

According to Investment Company Institute on Thursday, the total money market mutual fund assets of the US had fallen USD3.15 billion for the week that ended on Wednesday. The national association of investment companies in the US said that the amount of assets of such funds were now down to USD2.669 trillion.

A money market fund, which is also known as a money market mutual fund is an open-ended asset that invests in debt securities that are short-term like commercial paper and US Treasury bills. Based on a US statute, money market funds are regarded as essential providers of liquidity to intermediaries in the financial markets.

The mutual funds group said the money market mutal funds in retail had taken a USD2.78 billion dive to USD917.42 billion. Assets of taxable money market funds also in the same sector decreased USD2.2 billion to USD724.24 billion. Retail fund assets that are tax-exempted also showed a USD550 million decrase to USD193.18 billion.

In institutional money market funds, its assets dropped to USD1.751 trillion, which was a USD370 million decrease. However, a USD680 million premium was seen in taxable money market fund assets, increasing the amount of assets to USD1.681 trillion. On the other hand, Assets of tax-exempt funds showed a USD1.06 billion decrease to USD70.08 billion.

Although the data released by the Investment Company Institute did not provide a comprehensive assessment on why assets of mutual funds had dropped, it certainly reflected the anxiety of investors in light of the policies of the US Federal Reserve regarding its USD85 billion monthly asset-buying program.

The average seven-day yield money market mutual funds remained the same at 0.01% from last week, said iMoneyNet Inc through its Money Fund Report on Wednesday. The seven-day compounded yield was also flat at 0.01% The activity of the 30-day yield and the 30-day compounded yield also showed no change as well, both at 0.01%.

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