Despite advice to diversify into bonds and other assets, US retail investors continue to favour cash-like money-market funds, holding a record $3 trillion amid volatile markets and persistent yields.
Wealth managers are confronting a vast and stubborn stockpile of cash: roughly $3 trillion in US retail money-market funds alone, according to the Investment Company Institute, as investors continue to favour liquidity over longer-dated assets. Advisers have spent much of the past two years urging clients towards bonds and other income-producing investments, yet many savers remain unconvinced, preferring the safety of cash-like funds that can be redeemed quickly and have held up well in a volatile rate environment.
The shift began in 2022, when the Federal Reserve’s aggressive interest-rate increases pushed yields on safe instruments above 5% and helped create a habit that has proved difficult to break, the Wall Street Journal has reported. Even as rates have started to ease, the appeal of money-market funds has endured. Crane Data says the average yield on such funds has now slipped to 3.49%, but investors have not rushed for the exit.
For some clients, that caution is deliberate. Don Ross, a retired airline pilot, has spent years listening to advisers who wanted him to move more of his cash into markets, only to keep much of it parked in money-market funds. He holds 85% of his portfolio in equities and the rest in a money-market fund yielding 3.62%. After studying past bear markets, he concluded that severe downturns rarely last more than three years, so he prefers to keep enough cash available to meet spending needs without having to sell shares at the wrong moment.
Advisers argue that this preference for cash comes at a cost. They say longer-duration bonds can lock in today’s relatively attractive yields for years, providing a steadier income stream before rates fall further. David Royal, chief investment officer at Thrivent, has urged investors to consider high-quality corporate bonds and to spread maturities across different dates to reduce risk. He also points out that recent borrowing tied to artificial-intelligence infrastructure has helped push bond yields higher, creating opportunities in fixed income even after the bond market’s recent rally.
Others are trying to move clients beyond both cash and plain-vanilla bonds. Todd Stankiewicz, chief investment officer at Sykon Capital, has promoted buffer exchange-traded funds that use options strategies to limit losses while capping upside. These products typically run for a fixed term, often a year. Innovator Capital Management, one of the firms in the space, offers a programme that targets an 8.37% upside cap while fully protecting against market losses, though that protection is effectively paid for by surrendering gains beyond the cap.
Still, the central message from advisers is clear: staying in money-market funds makes sense only if the alternative fails to justify the risk. For now, however, many investors appear content to wait. Retail and institutional cash holdings have reached record levels in recent years, with some estimates placing the total above $7.6 trillion and later at $8.29 trillion, underscoring just how powerful the attraction of cash has become.
- https://www.naftemporiki.gr/finance/world/2149595/i-agora-diacheirisis-ploytoy-echei-ena-provlima-giati-3-tris-dolaria-gyrizoyn-tin-plati-stis-agores/?utm_source=rss&utm_medium=rss&utm_campaign=i-agora-diacheirisis-ploytoy-echei-ena-provlima-giati-3-tris-dolaria-gyrizoyn-tin-plati-stis-agores – Please view link – unable to able to access data
- https://www.cryptopolitan.com/retail-institutional-investors-7-6t-in-cash/ – As of September 2025, retail and institutional investors collectively held over $7.6 trillion in money market funds, a record high. Despite rising interest rates, this substantial cash reserve remains largely untouched, with investors preferring the stability and returns of these funds over more volatile assets. ([cryptopolitan.com](https://www.cryptopolitan.com/retail-institutional-investors-7-6t-in-cash/?utm_source=openai))
- https://www.advisorperspectives.com/articles/2026/06/05/chilling-money-market-funds-hot-retail-strategy – In June 2026, the U.S. money-market industry reached a record $8.29 trillion, nearly doubling Japan’s economy. This surge reflects a growing preference among investors, from retail savers to corporate treasurers, for the safety and liquidity offered by money-market funds amid market uncertainties. ([advisorperspectives.com](https://www.advisorperspectives.com/articles/2026/06/05/chilling-money-market-funds-hot-retail-strategy?topic=wealth-management&utm_source=openai))
- https://www.wealthmanagement.com/mutual-funds/a-7-trillion-and-growing-cash-pile-defies-wall-street-skeptics – Despite expectations of a mass exodus from money-market funds due to Federal Reserve interest-rate cuts and stock rallies, assets in these funds surpassed $7 trillion in November 2024. This trend underscores the enduring appeal of money-market funds, offering attractive yields above 5% to investors. ([wealthmanagement.com](https://www.wealthmanagement.com/mutual-funds/a-7-trillion-and-growing-cash-pile-defies-wall-street-skeptics?utm_source=openai))
- https://www.livemint.com/market/the-8-8-trillion-cash-pile-that-has-stock-market-bulls-salivating-11705575241926.html – By January 2024, rising interest rates had drawn over $8.8 trillion into money-market funds and similar cash-like investments. Investors are optimistic that, with rates poised to fall, this substantial cash reserve will eventually flow into stocks and bonds, potentially driving market growth. ([livemint.com](https://www.livemint.com/market/the-8-8-trillion-cash-pile-that-has-stock-market-bulls-salivating-11705575241926.html?utm_source=openai))
- https://www.livemint.com/market/investors-embrace-bond-funds-before-rates-start-to-fall-11722252197573.html – In July 2024, U.S.-listed fixed-income exchange-traded funds attracted nearly $150 billion, a record for this point in the year. This surge indicates a growing investor appetite for bonds, driven by high yields and expectations of future rate cuts. ([livemint.com](https://www.livemint.com/market/investors-embrace-bond-funds-before-rates-start-to-fall-11722252197573.html?utm_source=openai))
- https://www.allsides.com/news/09252025-0639/us-investors-are-flush-cash-and-happy-keep-it-there – By September 2025, assets in U.S. money-market funds reached a record $7.7 trillion, with over $60 billion flowing into these funds in the first four days of the month. This trend reflects investors’ preference for cash holdings amid market uncertainties. ([allsides.com](https://www.allsides.com/news/09252025-0639/us-investors-are-flush-cash-and-happy-keep-it-there?utm_source=openai))
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article presents recent data on the substantial cash holdings in US retail money-market funds, with figures up to $3 trillion. The latest available data from the Investment Company Institute (ICI) indicates that as of March 5, 2025, retail money market fund assets were $1.81 trillion. ([ici.org](https://www.ici.org/print/pdf/node/871931?utm_source=openai)) This suggests that the article’s data may be outdated, as it references a higher figure of $3 trillion. Additionally, the ICI’s most recent report from July 2026 indicates that retail money market fund assets have increased to $2.84 trillion. ([ici.org](https://www.ici.org/node/65306/printable/pdf?utm_source=openai)) The discrepancy between the article’s figure and the ICI’s data raises concerns about the freshness and accuracy of the information presented.
Quotes check
Score:
7
Notes:
The article includes direct quotes from individuals such as Don Ross, a retired airline pilot, and David Royal, chief investment officer at Thrivent. However, these quotes cannot be independently verified through available online sources. Without access to the original interviews or statements, the authenticity of these quotes remains uncertain. This lack of verifiable sources diminishes the credibility of the information presented.
Source reliability
Score:
6
Notes:
The article appears to be sourced from a press release or a low-quality news outlet, as indicated by the URL structure and the lack of a reputable publication name. This raises concerns about the independence and reliability of the source. The absence of a major news organisation’s involvement further diminishes the trustworthiness of the content.
Plausibility check
Score:
5
Notes:
The article discusses the substantial cash holdings in US retail money-market funds, with figures up to $3 trillion. However, this figure contradicts the most recent data from the Investment Company Institute (ICI), which reports retail money market fund assets at $2.84 trillion as of July 2026. ([ici.org](https://www.ici.org/node/65306/printable/pdf?utm_source=openai)) The discrepancy between the article’s figure and the ICI’s data raises questions about the accuracy and plausibility of the claims made.
Overall assessment
Verdict (FAIL, OPEN, PASS): REVIEW
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents data on US retail money-market funds, citing figures up to $3 trillion. However, this figure contradicts the most recent data from the Investment Company Institute (ICI), which reports retail money market fund assets at $2.84 trillion as of July 2026. ([ici.org](https://www.ici.org/node/65306/printable/pdf?utm_source=openai)) The article includes quotes from individuals such as Don Ross and David Royal, but these cannot be independently verified through available online sources. The source appears to be a press release or a low-quality news outlet, raising concerns about its reliability and independence. Given these discrepancies and the lack of independent verification, further editorial review is recommended before publishing.