A tough year in markets is leading some investors to seek refuge in cash, as they capitalise on higher interest rates and await chances to buy stocks and bonds at cheaper prices.
The Federal Reserve has roiled markets in 2022 as it implements huge rate hikes in an effort to moderate the steepest inflation in 40 years. But higher rates are also translating into better rates for money market funds, which had returned virtually nothing since the pandemic began in 2020.
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That’s made cash a more attractive hideout for investors seeking shelter from market gyrations – even though the highest inflation in forty years has dented its appeal.
Fund managers increased their average cash balances to 6.1 per cent in September, the highest level in more than two decades, a widely followed survey from BofA Global Research showed.
Assets in money market funds have stayed…
