Last year, for example, investors only put in a total $4 billion into money-market funds between May and August. This year, money-fund assets grew by $85 billion between May and mid-August.
Mr. Crane said that banks, beset by new capital rules, have recently been encouraging companies and investment funds to keep less money in their deposit accounts. That’s forcing corporate treasurers and fund managers to look for other places to park their cash.
Corporate treasurers are partial to money-market funds because the funds invest in short-term securities such as commercial and paper and U.S. treasurys, said Anthony Carfang, a partner at Treasury Strategies Inc., which advises corporate treasurers. That liquidity makes it easy for the funds to sell the securities and return cash to investors.
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