Investors sell stocks and hide cash in money market funds
Investors moved an additional $20.2 billion into money market funds last week, while pulling $13.8 billion out of equity funds, data from the Investment Company Institute shows.
Why it matters: The increased desire for money market funds, which are ostensibly savings accounts, has come as yields on the 10-year Treasury note fell from 2.51% on April 3 to 1.59% on Oct. 2, showing it's fear rather than greed driving fund flows.
- It's the continuation of a trend that has been in place all year and accelerated in the second and third quarters.
Details: Year to date, investors have moved $424 billion into money market funds, $361.5 billion of which has been deposited over the last 6 months. Conversely, $154.1 billion has been drained from equity mutual funds and ETFs in 2019, with $136.9 billion of outflows coming in the past 6 months, according to ICI's data.
- More than $3.5 trillion currently sits in money market funds, the most since 2009.