September 4, 2019 / 7:35 PM / 2 months ago

U.S. money fund assets hit highest since October 2009: iMoneyNet

(Reuters) - U.S. money market fund assets rose to their highest level since October 2009, as investors resumed their move into these low-risk products due to jitters about a slowing global economy and U.S.-China trade tensions, a private report showed on Wednesday.

Assets of money funds, which are seen nearly as safe as bank accounts, climbed by $14.87 billion to $3.331 trillion in the week ended Sept 3, the Money Fund Report said.

This brought their year-to-date increase in fund assets to about $360 billion.

Money funds are offering investors higher yields than most Treasury maturities. That, however, would change if the Federal Reserve reduces borrowing costs further to counter deteriorating business activity and the trade conflict between the world’s biggest economies.

The Fed cut interest rates for the first time since 2008 in July. The interest rates market signaled traders are prepared for another rate decrease at the Fed’s upcoming meeting later in September.

Taxable money market fund assets increased by $14.99 billion to $3.196 trillion in the latest week, while tax-free assets fell by $124.00 million to $134.63 billion, according to the report, published by iMoneyNet.

The iMoneyNet average seven-day simple yield for taxable money funds edged up to 1.76% from prior week’s 1.75%, which was the lowest level since October. The weighted average maturity among taxable funds was unchanged at 31 days.

The iMoneyNet average seven-day yield for tax-free and municipal funds was unchanged at 0.97%. The weighted average maturity of tax-free funds increased one day to 33 days.

Reporting by Richard Leong; Editing by Chizu Nomiyama

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