According to a statement released by Bank of America on Friday, investors have poured $756 billion into cash funds this year, drawn by the lucrative payouts and propelled by worries about banks.
According to BofA, which cited data from financial data provider EPFR, the rush into money market funds persisted in the week leading up to Wednesday, with $23.1 billion moving into the cash-like vehicles.
Money market funds, which are mutual funds that invest in highly liquid short-term debt like that issued by governments, have seen their yields increase as a result of rising interest rates.
Many consumers and businesses have moved their money out of bank accounts and into MMFs as a result of the failure of a few mid-sized U.S. banks this year.
BofA’s analysis also demonstrated that investors’ interest in tech companies persisted, with $500 million moving into funds that invest in tech equities for the sixth consecutive week.
The euphoria surrounding artificial intelligence has contributed to a 25% increase in the tech-heavy Nasdaq U.S. stock index this year.
Overall, though, stock funds lost $3.9 billion, marking their third straight week of withdrawals.
9.5 billion dollars were added to bond funds in the week ending on Wednesday. According to BofA, this increased overall yearly inflows to $152 billion.
The amount of money flowing into cash funds is now reaching the levels seen in 2020, when COVID-19 alarmed investors and $917 billion entered money market funds.
