Federateds assets rose 31% in the final five months of 2008, from $271.1 billion on June 30 to $355.7 billion at years end. During the whole year, the firms money market funds took in $110 billion.
Analysts say Federateds money market funds put it in a strong position, which is one of the reasons the firms stock is up 30% so far this year.
When you look at their mutual fund revenues, theyre better positioned than at any time since they went public in 1998, Keefe Bruyette & Woods Analyst Rob Lee told MarketWatch. Theyre benefiting from the breadth and performance of their products. Theyre a relatively defensive name. Its a firm with solid management.
And despite the risk that once the market turns around, the money in Federateds money market funds could go back out the door, CEO Chris Donahue thinks the money will, instead, be sticky. Once people come in, they realize that money market funds arent just parking places but cash-management vehicles. So we think the lions share of new assets will stay with us.