Yields on Money Funds Increased in Latest Week
May 18, 2011
NEW YORK -- Yields on money-market funds were higher in the latest week. The average seven-day compound yield on taxable funds rose to 4.94% from 4.91%, in the week ended Tuesday, according to IBC's Money Fund Report, an Ashland, Mass., newsletter. Compound yields assume reinvestment of dividends. Assets of the 817 taxable funds decreased by $9.98 billion to $718.98 billion. Withdrawals by institutional investors accounted for about $8.9 billion. The average seven-day simple yield rose to 4.83% from 4.79%. The average 30-day simple yield edged lower to 4.81% from 4.82%, the newsletter said. The average 30-day compound yield also decreased to 4.92% from 4.94%. The average maturity of the taxable funds' investments, which include commercial paper (short-term corporate IOUs) and Treasury bills, decreased by one day to 50 days. Yields on tax-free money funds were also slightly higher. The average seven-day compound yield rose to 3.01% from 3%, in the latest week, the newsletter reported. The latest yield is equal to a taxable 4.7% for an investor in the 36% tax bracket and to 4.98% for someone paying 39.6% in taxes. Assets of 412 tax-exempt funds decreased by $1.05 billion in the week ended Monday, to $135.82 billion, according to Money Fund Report.
