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Money market funds (MMFs) have soared to heights not seen in nine years as investors continue to pull capital from equity and bond funds and pour it into MMFs. It’s still early in the year, but early numbers suggest Moody’s outlook for MMFs in 2019 could end up being rather conservative.
Q3 hedge fund letters, conference, scoops etc
Fifth consecutive week of inflows to money market funds
Data from iMoneyNet indicates that MMFs tacked on another $35.62 billion in assets last week, bringing the total assets under management by MMFs to $3.029 trillion. The last time this number surpassed $3 trillion was in March 2010. Over the last five weeks, assets under management in MMFs climbed $159.53 billion.
Data from another source, Investment Company Institute (ICI), indicated that U.S. money market funds enjoyed nine consecutive weeks of inflows through Jan. 2, so adding the week ending Jan. 8 means MMFs have enjoyed 10 straight weeks of inflows. The Financial Times added that the nine-week streak of inflows was the longest since October 2008 when the financial crisis was in full swing and the U.S. Treasury enacted emergency procedures to protect MMF investors from losses.
Meanwhile, data from ICI reveals that outflows from stock and bond funds continue. The firm pegged equity outflows at $11.29 billion and bond fund outflows at $14.16 billion for the week ending on Jan. 2.
Stable outlook for money market funds
Moody’s Investors Service said in its 2019 global outlook for money market funds in November that conditions look stable. According to the firm, “benign” credit conditions and improving bank credit should support money market funds, as should new regulations in Europe designed to make them more resilient to shocks in the market.
Other factors which contributed to Moody’s stable outlook include rising short-term rates, which make cash look more attractive as an asset

Article From: "Michelle Jones"   Read full article