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Originally published Saturday, March 20, 2010 at 10:00 PM

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Money funds fall below $3 trillion for first time in 2 years

Assets in U.S. money-market mutual funds fell below $3 trillion for the first time in more than two years, as rising yields spurred sales of Treasurys and companies liquidated holdings to pay taxes.

Bloomberg News

Assets in U.S. money-market mutual funds fell below $3 trillion for the first time in more than two years, as rising yields spurred sales of Treasurys and companies liquidated holdings to pay taxes.

Money-fund assets were last below $3 trillion in November 2007.

Investors withdrew $75.6 billion from money funds in the week ended March 16, reducing assets to $2.99 trillion, according to research firm ImoneyNet.

It was the third-largest one-week decline on record, the company said.

Money funds have lost about $850 billion, or 22 percent, since the U.S. stock market bottomed out on March 9, 2009.

U.S. corporations had a March 15 deadline to pay taxes for the 2009 calendar year.

Yields on three-month Treasury bills rose this past week to a seven-month high. Institutional investors may purchase Treasurys directly, rather than through money-market funds, when rates rise because the impact on fund yields is delayed by existing, lower-yielding holdings, said Peter Crane, president of fund-tracking Crane Data.

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