Prime Time Returns for U.S. Money-Market Funds
A left-for-dead corner of the industry is staging a comeback.
Cash is turning heads once again.
Photographer: Andrew Harrer/Bloomberg
More than $1 trillion of outflows in just 12 months would roil just about any segment of the global financial markets. For prime funds, a corner of the U.S. money market industry that had only $1.4 trillion of assets to begin with, it looked like a fatal blow.
Yet almost two years after reaching their low point, prime funds, which buy certificates of deposit and company IOUs, are staging a surprising resurgence. They’ve attracted inflows for 10 consecutive weeks, the longest stretch since early 2009, according to Investment Company Institute data through Sept. 12. At $534 billion, the industry remains a fraction of what it was before sweeping changes to U.S. money markets prompted a mass exodus starting in late 2015. Yet the steady stream of cash suggests a path forward.