Assets in Money Market Funds

Money Market Assets

Source: Investment Company Institute

Investors continue to stockpile cash, according to the latest figures released Thursday by the Investment Company Institute. Investors put more than $13 billion into money market accounts during the week ended Feb. 14. Cash sitting on the sidelines now stands at a record $2.018 trillion. Retail investors dropped $590 million into cash, while institutions -- as they have done for several weeks now -- put in much more. Indeed, institutions stuffed $12.86 billion into cash investments. The rising level of cash suggests that investors still remain uneasy about committing cash to the stock market. But the record amount of sideline cash is bullish. As we've been saying for weeks now, if investors ever decide the trade-off in stocks is better than cash, the stock market could get a big boost as money makes its way to equities.

Related Metrics Cash as a Percentage of Mutual Fund Portfolios Mutual Fund Inflows/Outflows ** Back to Metrics **

Why This Metric Matters Cash levels can rise in money market funds for any number of reasons. Investors may move money out of stocks and into money market funds for fear of market conditions. Perhaps they're just taking some profits in the midst of a bull market. Or they may be setting aside money for specific purchases, like a new home or a car. Whatever the reason, money market funds represent assets that could eventually make their way back into the stock market or the broader economy. Short term, a sharp spike in money market assets is not seen as a good sign for stocks, as it's money not finding its way into equities. But longer term, these funds represent a potential source of assets that could help fuel the market, or at least economic growth.

How Often Updated on TSC Weekly, on Thursday evening

Historical Info This metric has been followed by Investment Company Institute, the mutual fund trade group, since 1974. Money market balances reached a record high of $1.962 trillion in January 2001.

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