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Originally published Saturday, October 19, 2013 at 8:04 PM

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Money funds continue to see investor exodus

Investors pulled $41.6 billion from money-market mutual funds in the week ending Tuesday, a week after $15.7 billion was withdrawn.

Bloomberg News

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Investors kept pulling billions from U.S. money-market mutual funds in the week ending Tuesday, withdrawing $41.6 billion, or 1.6 percent of total assets, as concern grew over lawmakers’ inability to strike a budget deal that would avert a default on Treasury securities, an issue that was finally resolved Wednesday night.

The exodus was punctuated by the withdrawal of $21.6 billion on Oct. 11, according to research firm Crane Data in Westborough, Mass.

Investors pulled $15.7 billion in the preceding week. While the spike appeared connected to the approaching debt ceiling, it was exacerbated by companies moving cash to make payroll and meet a quarterly tax-payment deadline, said Peter Crane, president of Crane Data. “The outflows are still quite manageable,” Crane said. “They’d be worrisome if they continued.”

Several of the largest money-fund providers, including Fidelity and JPMorgan Chase, have said they have sold Treasurys maturing in the next few weeks and are building extra liquidity to meet potential client withdrawals.

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