Investors Load Up On Money Market Funds Through Turmoil

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  • Markets have been volatile in recent weeks as investors digest news of SVB failure and Credit Suisse buy-out
  • Financial stocks saw significant intra-day moves, driving market returns
  • March top-buys reveal flight to cash funds

β€œIt has been a rollercoaster few weeks for markets, with financial stocks driving returns as the sector digested first the news of Silicon Valley Bank (NASDAQ:SIVB) going bust, UBS (NYSE:UBS) swooping in to rescue Credit Suisse (NYSE:CS) and the European Central Bank sticking to its forward guidance on interest rate hikes.

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HL clients traded through the turmoil, with an almost unanimous move to risk-off assets, an about turn from our investor sentiment survey in the first week of March, which showed an optimistic outlook for markets.

Investors Snap Up Money Market Funds

March was the sixth consecutive survey to show an increase in investor confidence, but subsequent market activity has clearly impacted that sentiment. In the past two weeks, investors have snapped up money market funds promoting them to the most-bought list, alongside European equities – where clients were hoping to pick up a bargain as the market dipped.”

HL data

Top Funds, March 2023 (net buys, alphabetical)
abrdn Sterling Money Market
Blackrock European Income Fund
Fidelity Cash
Fidelity Global Dividend
Fidelity Global Technology
Jupiter Asian Income
Jupiter Global Value Equity
Jupiter Income
Ninety One UK Special Situations
Royal London Short Term Money Market

Article by Emma Wall, Head of Investment Analysis and Research