No Let Up in Money Market Funds' Popularity

Sales of triple-A rated money market funds by the Institutional Money Market Funds Association’s (IMMFA) members rose on the previous quarter, according to the association. Euro and sterling funds were particularly strong, showing rises of 10.1 per cent and 9.5 per cent respectively. US dollar denominated assets fell slightly in the same period. Peter Crane, Vice President and Managing Editor of iMoneyNet, Inc, commented: ‘European corporate and government investors continue to migrate their cash investments towards triple-A rated money market mutual funds. Other institutional investors and financial companies too are becoming aware of the distinct yield advantage these vehicles have over direct money market instruments during periods of falling interest rates.’ He went on to point out that money funds are both safe and convenient vehicles, providing overnight liquidity, with a maturity profile of approximately 40 days. ‘Investors may come for the yield, but we expect them to stay because of the convenience and safety these funds provide,’ he noted.

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