Assets in money market funds have increased 18% to a record $730 billion so far this year, according to a report by IBC/Donoghue Inc.
In the past five years, assets have grown by 72%.
The growth is driven by several factors: widespread acceptance of the funds as an alternative to CDs and individual securities; spillover of assets from equity and bond funds as well as growth alongside growth of those funds; and a broad investor base ranging from individuals and small companies to municipalities and Fortune 500 firms.
Money market mutual funds will see total assets move above the $1 trillion mark by early 1998, according to Ralph G. Norton, managing editor of IBC's Money Market Insight, a publication of IBC/Donoghue Inc., Ashland, Mass.
"Reaching the $1 trillion mark will clearly be a milestone for the money market industry. It will have grown from $100 million in 1973 to over $1 trillion in a period of about 23 years - a 10,000-fold increase. How many businesses can claim that kind of growth?" Mr. Norton said in the IBC/Donoghue report.
