Money market funds lure investors with returns

Depositors have started to move their money from bank accounts to money market funds, in part because of ongoing concerns about the banking crisis and also offers of higher returns, according to a recent report from financial services company Morningstar.

The Morningstar Research (Thailand) report found signs of increasing capital movement from deposit accounts, which provide low yields, following the collapse of California-based Silicon Valley Bank (SVB) in early March.

Some US$355 billion flowed into money market funds in March, the largest inflow into this type of fund since the outbreak of Covid-19, according to the report.

“In every financial crisis, this cycle returns,” Morningstar noted.

“Back in March 2020, when stock exchanges entered a bear market and debt…