June 21, 2018 / 11:55 PM / 3 months ago

U.S.-based money market funds post $51 billion net outflows for week: Lipper

NEW YORK (Reuters) - U.S.-based money market funds posted $51 billion of net outflows for the week ended Wednesday, the largest cash withdrawal since 2011 and the seventh largest ever, according to Lipper data on Thursday.

FILE PHOTO: U.S. Dollar banknotes are seen in this photo illustration taken February 12, 2018. REUTERS/Jose Luis Gonzale/Illustration/File Photo

The drawdown in money fund assets, which companies use as alternatives to bank accounts to manage their cash, likely stemmed from two factors: corporate tax receipts and investor payment on Treasury supply, said Pat Keon, senior research analyst at Thomson Reuters Lipper.

Last week, corporations were sending cash to the government ahead of a quarterly tax deadline. On June 15, the Treasury said it received $26.0 billion in corporate taxes, compared with $42.2 billion a year earlier.

Moreover, the Treasury raised about $43 billion in new cash as investors settled on what they bought at last week’s Treasury auctions, which included $68 billion worth of three-year, 10-year and 30-year debt.

Meanwhile, U.S.-based equity funds posted $1.27 billion of net outflows in the week ended Wednesday, marking the third consecutive week of cash withdrawals, Lipper said.

The majority of those outflows came from U.S.-based equity exchange-traded funds, which posted net outflows of $5.8 billion. Conversely, U.S.-based equity mutual funds attracted $4.6 billion of net new cash for the same period, according to Lipper.

Emerging-market funds saw another volatile week. Investors pulled $4.36 billion of net cash from U.S.-based emerging market equity funds and $452 million from U.S.-based emerging market debt funds, according to Lipper data.

Additional reporting by Richard Leong; Editing by James Dalgleish and Rosalba O'Brien

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