Reuters: War and Record MMF Assets
Reuters writes, "Investors drive US money market fund assets to records as war-related risk fears multiply." The piece says, "As the Iran conflict intensifies, the spike in oil prices and rising inflation fears are spurring investors to ditch stocks as too risky and shun traditional safe havens such as gold in favor of money market funds. The result: assets in those ultra-short-term and ultra-safe Treasury funds are now hovering around $8 trillion, according to calculations from providers such as the Investment Company Institute, JPMorgan Chase and Crane Data, which specializes in tracking money market flows. While their methodology varies and precise calculations range from $7.8 trillion to $8.1 trillion, the sources agree that assets have hit a record amid the conflict." Reuters quotes Malcolm Polley of Stratos Investment Management, "When you have times of dislocation and times of fear, cash is the only thing that makes sense to a lot of people, because there's the belief that you 'can't lose' by holding it.... [T]he world is not coming to an end just yet." The article adds, "To some, that offers a great case for putting money to one side in a product that currently offers yields north of 3% and, in a handful of cases, approaching 4%, depending on the financial institution. In the first few days of the Iran war, Deborah Cunningham, chief investment officer of global liquidity markets at Federated Hermes, said in an analysis published earlier this month that the 'collective negative vibe often sends investors to safer harbors'.... Cunningham told Reuters she pegs the size of that cash mountain in money markets at $8.3 trillion."
