Investors are withdrawing from money market funds this week before a federal guarantee to safeguard their assets expires today. The outflows could sharpen scrutiny of how to regulate the funds, which now hold US$3.5T despite paying almost no interest of late. Investors took out a total of US$55B from money market funds last Tuesday and Wednesday. Money funds traditionally invested in super-safe debt instruments and paid little interest. The average stock mutual fund has earned 21.92% since January, the top money funds’ 7-day yields were all around 50 basis points or .5%, according to www.cranedata.com.
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