Retail investors are piling into cash after a brutal sell-off in financial markets this year triggered trillions of dollars in losses, stamping out enthusiasm for riskier assets.
Nearly $140bn has poured into retail money market funds so far in 2022, according to the Investment Company Institute, taking the size of these vehicles to $1.55tn after 10 straight weeks of fresh investment. Inflows have totalled almost $36bn in the past three weeks alone.
That rush into cash follows a long and volatile sell-off in US equity markets this year, which has wiped nearly $15tn off the valuations of publicly traded companies. Wall Street’s benchmark S&P 500 index last month closed out its longest streak of quarterly losses since the 2008 financial crisis.