US money market funds are on course for some of their biggest inflows since the height of the financial crisis, in a sign that risk-averse investors are seeking safe haven in US Treasuries.
The funds took in $54.9bn in November and another $36.8bn by December 21, according to data from Lipper, the funds research company. That is the largest two-month inflow since December 2008 and January 2009, when $195bn was invested.
The flight to safety has coincided with a mini-recovery in the equity markets, with the S&P 500 rising 14.5 per cent since October 3. “The positive signals from equity markets have been based on light trading volumes and low participation,” said Matthew Lemieux, an analyst at Lipper. “I don’t want to say the rally is a mirage, but the money market flows show that many investors remain very sceptical even as markets recover.”