Money markets experienced their largest inflows in May since the Mini Budget, attracting £419m. The only other month where money market funds have seen such strong inflows was in March 2020.
Calastone head of global markets Edward Glyn said the bonds with short maturities the funds invest in are “typically among the least risky assets available” and are closely linked with interest rate levels.
“Wobbles in the US banking system have reminded investors of the risks of having bank deposits above insured thresholds too, leaving money markets as an obvious place for wealthier individuals to park surplus cash,” he said.
In contrast, equity funds saw their worst figures since the Mini Budget, losing £302m after experiencing strong inflows throughout March and April.
UK funds were the worst performers, with outflows of £583m throughout the month, while European, North American and Asia-Pacific funds also suffered.