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Are retail prime money market fund investors increasingly more sensitive to stress events?

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  • Anadu, Kenechukwu
  • Levin, John
  • Lu, Lina
  • Malfroy-Camine, Antoine
  • Oefele, Nico

Abstract

U.S. prime money market mutual funds have experienced two episodes of bank-like runs, in 2008 and 2020, driven primarily by institutional investors. Using impulse response analysis, we examine the degree to which retail investors’ redemption sensitivity has evolved over these two stress periods. We find that, on average, net outflows from retail prime MMFs increased from 2008 to 2020. In contrast, over the same period, the magnitude of net outflows from institutional prime MMFs were, on average, relatively unchanged, albeit significantly larger than those from retail funds.

Suggested Citation

  • Anadu, Kenechukwu & Levin, John & Lu, Lina & Malfroy-Camine, Antoine & Oefele, Nico, 2025. "Are retail prime money market fund investors increasingly more sensitive to stress events?," Economics Letters, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003118
    DOI: 10.1016/j.econlet.2025.112474
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    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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