NEW YORK (Reuters) – U.S. money market funds amassed their highest level of assets since October 2009 as investors shift cash into low-risk products amid worries about a global economic slowdown and trade tensions, a private report released on Wednesday showed.
Taxable money funds, which are seen as almost as safe as bank accounts, are offering higher yields than most U.S. Treasuries.
Benchmark 10-year Treasury yields were 1.588% on Wednesday after hitting 1.475% last week, which was a three-year low.
Total money fund assets increased by $17.11 billion to $3.328 trillion in the week ended Aug. 20, putting them at their highest level since October 2009, the Money Fund Report said.
Money fund assets have grown by $357 billion, or 12%, since the end of 2018.
Taxable money market fund assets increased by $17.37 billion to $3.192 trillion, but tax-free assets fell by $261.90 million to $135.69 billion, according to the report, published by iMoneyNet.
The iMoneyNet average seven-day simple yield for taxable money funds fell to 1.79%, the lowest level since October, from 1.80% a week earlier. The weighted average maturity among taxable funds lengthened by one day to 30 days.
The iMoneyNet average seven-day yield for tax-free and municipal funds rose to 0.96% from 0.94% the week before. The weighted average maturity of tax-free funds was unchanged at 29 days.
U.S. money market rates have stabilized in the aftermath of the Federal Reserve’s first rate decrease since 2008 at the end of July.
Traders widely expect the U.S. central bank to lower key overnight rates by another quarter point at its policy meeting next month to counter risks from a softening global economy and disruptions from the trade conflict between China and the United States.
GRAPHIC: U.S. money fund assets – here
Reporting by Richard Leong; Editing by Tom Brown