Yields on Money Funds Were Lower in Latest Week
May 11, 2011
NEW YORK -- Yields on money-market funds were lower in the latest week. The average seven-day compound yield on taxable funds decreased to 4.91% in the week ended Tuesday from 4.93% the week before, according to IBC's Money Fund Report, an Ashland, Mass., newsletter. Compound yields assume reinvestment of dividends. Assets of the 818 taxable funds decreased $1.16 billion to $728.96 billion. Withdrawals by institutional investors accounted for $640.2 million of that amount. The average seven-day simple yield eased to 4.79% from 4.82%. The average 30-day simple yield remained at 4.82%, the newsletter said. The average 30-day compound yield was also steady, at 4.94%. The average maturity of the taxable funds' investments, which include commercial paper (short-term corporate IOUs) and Treasury bills, remained at 51 days. Yields on tax-free money funds were also lower. The average seven-day compound yield fell to 3% in the latest week from 3.08% a week earlier, the newsletter reported. The latest yield is equivalent to a taxable 4.69% for an investor in the 36% tax bracket and to 4.97% for someone paying 39.6% in taxes. Assets of 413 tax-exempt funds decreased by $509.8 million in the week ended Monday to $136.87 billion, according to Money Fund Report. The average portfolio maturity shortened by one day to 50 days. IBC's Money Fund Report is published by IBC Financial Data Inc., a subsidiary of IBC USA (Publications) Inc.
