It is no surprise that 1998's volatile stock market sent many investors heading for the relative calm and safety of money market funds. But investors seeking cover were only part of the explanation for the success of money funds last year. Another key factor was the increased use of money funds by corporations to manage cash.
The entire universe of money market funds brought in a record $290 billion in 1998 to finish the year with $1.35 trillion under management, according to IBC's Money Fund Report, a service of IBC Financial Data in Ashland, Mass. Overall, money fund assets grew more than 27 percent during 1998. Assets in all money funds have more than doubled since 1995 (see chart page 10.)