NEW YORK (Reuters) - U.S. money market fund assets rose to their highest level since late 2009, as investors poured more cash into these low-risk accounts even while major Wall Street indexes reached record peaks on hopes for rate cuts from the Federal Reserve, a private report released on Wednesday showed.
Total money fund assets jumped $41.12 billion to $3.234 trillion in the week ended July 9, a level not seen since Dec. 22, 2009, the Money Fund Report said on Wednesday.
Total fund assets have grown for 11 consecutive weeks, increasing by about $224 billion during the current stretch.
For some cautious investors, earning about a 2% yield with almost no risk has been more compelling than buying more junk bonds and stocks, which have produced the double-digit total returns in the first half of 2019.
The average yield on taxable money funds is comparable to the yields on benchmark 10-year Treasury notes (US10YT=RR).
A softening global economy and trade conflicts have stoked the inflows into money funds, analysts said.
"It's the fear. It's a conservative way to deal with risks out there," said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.
Taxable money market fund assets increased by $39.58 billion to $3.095 trillion, the highest level since Aug. 11, 2009, according to the report, published by iMoneyNet.
Tax-free money fund assets rose by $1.54 billion to $139.40 billion.
The iMoneyNet average seven-day simple yield for taxable money funds rose to 2.02% from 2.00% the week before. The weighted average maturity among taxable funds was unchanged at 29 days.
The iMoneyNet average seven-day yield for tax-free and municipal funds dropped to 1.15% from 1.43%, which was its highest since early May. The weighted average maturity of tax-free funds shortened by one day to 28 days.
(GRAPHIC - U.S. money fund assets: https://tmsnrt.rs/2Em6sNq)