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ICI Reports Money Market Mutual Fund Assets at $3.9 Trillion. Money fund assets continued their tear in the latest week, rising $54.7 billion to a record $3.895 trillion. Retail money fund assets grew $13.2 billion to $1.368 trillion, while Institutional assets grew $41.5 billion to $2.527 trillion. General Purpose (Prime) Institutional funds led the surge, rising $23.0 billion to $1.128 trillion. Government Inst assets rose $12.5 billion to $1.205 trillion and Tax Exempt Inst assets rose $6.0 billion to $194.2 billion. Prime Retail jumped $7.6 billion to $800.3 billion; Govt Retail fell $694 million to $260.5 billion; and Tax Exempt Retail jumped $6.3 billion to $307.2 billion.
USA Today's "Worst News of 2008"
USA Today's "Fundline: What was the worst fund news to hit in 2008?" asks, "Who was 'swimming naked' last year?" It answers, "The Reserve fund. The nation's oldest money market mutual fund collapsed Sept. 16, allowing its share price to fall below $1 -- 'breaking a buck,' as it's known in the industry. It was a staggering blow to the money market industry, which has long held itself out as a bastion of safety. Bruce Bent ... was an outspoken critic of other money funds, often arguing that they took too much risk." "A lot of money funds lost their way," he told the paper. "Just follow the rules. Don't get clever." The article also discusses problems in "Ultrashort income funds." In other news, see FT Alphaville's "Slow road to recovery", which includes a Crane Data table showing the recovery in Prime money fund assets.
"Short View: Money market mystery"
The Financial Times writes in "Short View: Money market mystery" that, "The most recent figures from the Federal Reserve show that in November, the amount of money held in US money market funds exceeded the amount in equity funds, for the first time in 15 years." FT continues, "The assets of equity funds had almost halved from $6,900bn in late 2007 to $3,600bn. Meanwhile, money market funds' assets rose to $3,700bn, double their level of three years earlier. According to Citigroup, retail money funds now account for more than 14 per cent of the total market capitalisation of the US stock market, far above the long-term average of 8 per cent." See also, S&P's release "Ratings Withdrawn On Eight Reserve Management Funds."