Amid the dizzying volatility gripping the stock market, Charles Schwab & Co. is offering some tips to worried investors looking to get into money market mutual funds.
Though the San Francisco broker is encouraging investors to take a "long haul" view of the markets, instability in equities has prompted a clear movement into cash-equivalent securities, said William J. Klipp, president of Charles Schwab Investment Management.
Mr. Klipp said there were "substantial net buys" into money market funds during August and during the first week of this month.
In August, net flows into money funds totaled $4.1 billion, and last week's flows stood at $1 billion, said Mr. Klipp. That's significant, he said, because Charles Schwab only sees $1 billion to $1.5 billion flowing into money funds during an average month.
Basic advice to investors includes recommendations that they find an experienced manager and choose a fund with low expenses. Schwab also suggests shopping around for competitive yields, as well as taking one's tax situation into account when investing in a fund.
Schwab has put its suggestions on the firm's Web site, but Mr. Klipp said it remains unclear whether the firm will include the information in future statements.
Though there has been an increase into money funds, Schwab's proprietary stock and bond funds have not suffered, he said.
Schwab, which manages about $11 billion of mutual fund assets out of a total of $72 billion of assets, is still getting average inflows of about $300 million per month, said Mr. Klipp.
Other advice being doled out by Charles Schwab? "Not to panic, that the markets do go up and they go down," Mr. Klipp said.
