On May 5, data from the Investment Company Institute (ICI) showed that in the week of May 3, the open interest in the money market was US$5.31 trillion, a record high.
The U.S. money market received $47.1 billion in inflows in the latest week.
Global markets are increasingly worried about the banking sector, and investors are attracted by attractive interest rates after the Federal Reserve raised interest rates on Wednesday.
The recent rise in the size of these funds has been largely driven by depositors pulling money from U.S. banks.
Initially, most of the inflows were driven by more attractive interest rates, especially given that central bank rate hikes tend to pass through to these investment vehicles faster than banks.
However, concerns about the stability of some smaller banks have fueled the inflows in recent weeks.