Money Market Funds/ETFs Gain More Than $286 Billion as Fearful Investors Pull Deposits out of Banks

Goldman Sachs, JPMorgan Chase and Fidelity are the biggest beneficiaries of the change in investor behavior, which increased flight from bonds and deposits into U.S. money market funds over the past two weeks as the collapse of two regional U.S. banks and the Credit Suisse bailout raised concerns about the safety of bank deposits.

More than $286 billion poured into money market funds in March, marking the month the one with the biggest inflow since the Covid-19 crisis, according to data provider EPFR.

Goldman's U.S. cash funds have received almost $52 billion, up 13%, since March 9, the day before U.S. authorities nationalized Silicon Valley Bank. As of Friday morning, JPMorgan funds received almost $46 billion, while Fidelity recorded almost $37 billion inflows, according to iMoneyNet data.

Money market funds typically hold very low-risk assets that are easy to buy and sell. The yields available for this flow of funds are now the best in years as they rise with interest rates raised to a 15-year high by the U.S. Federal Reserve in its quest to curb inflation. Net inflows were smaller in January and February, setting the stage for the strongest quarter for U.S. money funds since the outbreak of the coronavirus pandemic three years ago.

The pace of inflows has accelerated over the past two weeks, especially from large savers seeking new safe haven. While U.S. officials agreed to back all deposits at SVB and Signature Bank that went bankrupt that same weekend, they did not guarantee deposits greater than $250,000 at other institutions.