The final figures are in. Money funds had a spectacular 1995, fueled by rising yields as well as inflows from 401(k), municipal and corporate investors.
Assets totaled a record $759.1 billion as of Dec. 31, a gain of 23.3% from the prior year, according to IBC's Money Market Insight, Ashland, Mass., a newsletter tracking the industry.
Fidelity Investments, Boston, with 39 money funds and combined assets of $80.2 billion at year end, continued to be the top player, although Merrill Lynch is catching up, with $79.2 billion in its 24 funds.
Other top players include Dreyfus Funds, Federated Investors and Smith Barney Mutual Funds. Competition is clearly intense. The firm reported money market mutual funds continue to waive all or a portion of incurred expenses.
In the fourth quarter of 1995, for the seventh quarter in a row, the percentage of funds waiving expenses rose significantly, to a record 61.2% of funds, from 60.3% in the previous quarter.
In terms of performance for 1995, the top six general purpose taxable funds were: Strong Money Market, with a 6.25% total return, followed by OLDE Premium Plus MM Series; Dreyfus BASIC MMF; and Nations Cash Reserves/Capitol Class.
Among institutional-only funds, the winner was Landmark Institutional Liquid Reserves, with 6.12%.
The average taxable money market fund gained 5.49% for the year, its highest level since 1991.