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Survey Indicates More Corporate Treasurers Are Using Money Market Funds

A recent survey of corporate treasurers indicated that companies investing in money market funds increased by more than 11 percent since 2011.  While the number of companies investing in money market funds increased, the average proportion of a company’s case held in these funds declined to 44% (from 50%).  The survey proposed that increased use of stable money market funds may be the result of increased familiarity with money market funds, continued confidence in the funds, and limitations on the range of investments available to treasurers.  Slightly more than half of the survey participants already invested in stable net asset value money market funds, and 25% of respondents indicated that these investments would likely become more important in the future. 

While use of money market funds is increasing, a significant number of corporate treasurers do not use the funds while others have reduced the percentage of cash invested in the funds.  Treasurers participating in the survey expressed concerns about the funds, particularly counterparty risk and liquidity.  While low yield was also an issue, it was less of a concern to the treasurers than in prior years. 

The survey included responses from 161 corporations, with 49% of the respondents located in North America.  The Sungard survey report is available here.