Off the wires: Money market funds swell by more than $286bn amid deposit flight

In this blog, EPFR expands on a Financial Times’ recent article, Money market funds swell by more than $286bn amid deposit flight.


View from EPFR

The collapse of several US regional banks and the UBS-Credit Suisse merger in March spurred investors to look for alternative homes for their money. For many the answer was Money Market Funds.

As the Financial Times article highlights, Money Market Funds offer more attractive yields than most cash management options, such as certificates of deposit (CDs), offered by banks. Amidst the recent turmoil, the US Money Market Funds tracked by EPFR absorbed over $286 billion in just a few weeks. That influx accounts for more than half of their total dollar inflow year-to-date.

Chart representing "Cumulative flows, in USD billions, to all Money Market Funds"

Utilizing EPFR’s data, however, allows us to look at how funds dedicated to non-US assets are faring and see which mandates investors favored when making the switch.

Breaking down daily flows throughout March by fund geographic mandate, the charts below demonstrate that the clear winners from this huge reallocation are US and, to a much lesser degree, Europe Money Market Funds. On the flip side, however, Global and Japan Money Market Funds recorded net outflows of $6.89 billion and $3.07 billion, respectively, over the same period.

Chart representing "Cumulative flows, in USD billions, to Money Market Funds: Top/Bottom by Geographic Focus"

Looking at just US Money Market Funds, and using EPFR’s fund-level tags, shows that just over half of the funds tracked pulled in the bulk of the money. Moreover, within the subset of funds receiving net inflows in March, a large proportion consisted of those investing primarily in T-bills and other government assets.

Chart representing "US Money Market Funds"Note: “Government” and “Corporate or Prime” funds were identified based on fund name tags.


Did you find this useful? Get our EPFR Insights delivered to your inbox.

Related Posts

Getting ready for an anomalous election

Getting ready for an anomalous election

Although the 2024 US presidential election looks likely to be a re-run of the 2020 contest, it still meets the classic definition – irregular, deviating from the normal – of the word anomalous. From the age of the incumbent to the Republican challenger Donald Trump’s legal baggage and lack of decorum, everything about this election seems unusual.

Better, More Actionable Insights

Let us show you how EPFR can create value for your specific strategy