Tax-exempt money market funds have recently showed renewed strength after several years of lackluster yields in a prolonged low-interest-rate environment. For treasury and financial risk management professionals, this presents an attractive opportunity to earn interest on corporate investments, with the potential for even more yield as rates increase later this year.

A weekly high-grade market index composed of seven-day tax-exempt variable-rate demand notes (VRDNs), known as the SIFMA index, has increased steadily from yields of 0.01 percent at the beginning of 2016 to as high as 0.87 percent on October 3, 2016. The average from August 2016 to January 2017 for the SIMFA index was 0.66 percent yield, which compares very favorably with a 0.05 percent average for 2015.

Meanwhile, yields of one-year municipal notes have risen from 0.62 percent at the start of 2016 to the current 0.95 percent yield posted by Bloomberg Valuation on February 14, 2017. At these levels, the SIMFA is providing 92 percent of the yield reflected by the LIBOR seven-day average, according to Muni Monitor Analytics.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.