Released: August 22, 2007

Billions stream into safe government funds

Source: John Waggoner, USA Today

Amid concern about the credit crunch, institutional investors are shifting money out of money market funds that could potentially hold risky corporate debt and into other money funds that invest only in ultrasafe government securities. Individual investors so far aren’t fleeing, but there are signs they’re getting nervous.

Assets of all money funds that cater to big institutions rose $22 billion from Aug. 14 through Tuesday, says iMoneyNet, which tracks the funds. Money funds are a traditional safe haven when the stock or bond markets are in turmoil.

But prime money funds that cater to big institutions saw their assets fall $24 billion the same period, iMoneyNet says. Institutional money funds that invest only in government securities, such as Treasury bills, saw assets jump $46.1 billion.

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