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Money fund assets fell 6% in 2Q

Fidelity, J.P. Morgan and Dreyfus defy trend, report finds

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By Sue Asci

August 4, 2009 1:33 pm ET

Assets of money market mutual funds declined by $215 billion, or 6%, in the second quarter, according to Crane Data LLC, a Westborough, Mass.-based research firm.

Money market fund assets stood at $3.6 trillion on July 29, Crane reported, down $196 billion, or 5.1%, from their level at Dec. 31.

“I estimate that assets will decline by a total of 10% by the end of the year because of the ultra-low interest rates,” said Pete Crane, president of the company. “The Fed is forcing people into riskier assets.”

Some of the largest fund companies, however, reported net inflows in the latest quarter, including Fidelity Investments of Boston, where money fund assets grow by $6.3 billion, or 1.3%.

Other gainers were New York-based Dreyfus Funds, part of The Bank of New York Mellon Corp., which grew by $2.7 billion, or 1.2%, and J.P. Morgan Asset Management of New York, whose money funds added $2.3 billion, or 0.6%.

The report found greater concentration in the money market business, with the largest 25 fund complexes accounting for 94.3% of money fund assets as of June 30, compared with 91.2% a year ago.

Crane Data tracks domestic money funds offered by 85 fund companies.

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