They don't get the publicity that their more glamorous cousins - stock and bond mutual funds - receive.

But money market mutual funds have been growing steadily in recent years, a clear sign that these short-term financial instruments are growing in significance.

And that's benefiting commercial banks, which manage an ever-increasing share of the assets in these funds.

Some observers say that banks have been pivotal in popularizing money funds and making them a viable alternative to insured time deposits. Indeed, today bank-run money market mutual funds represent 30% of total U.S. money fund assets - up from 20% in 1992.

"A lot of people see banks as their primary financial intermediary, and that makes money funds a natural fit for banks," said Michael E. Harrington, first vice president at Kemper Financial Services, Chicago.

He added, "There is a still a phenomenal amount of money in time deposits, but it's lower than it was just a few years ago, and I can't help but think that some of that money has gone into money funds."

Since the beginning of the year, total assets in money market mutual funds have grown 18%, to $734.8 billion, according to the latest data from IBC/Donoghue Inc., a fund tracking firm in Ashland, Mass.

Indeed, money market funds have been gaining steam for quite some time. In the past five years, money market assets have risen 72%. At that rate of growth, IBC/Donoghue predicts assets will break the $1 trillion mark before decade's end.

The widening acceptance of mutual funds in general and the narrowing spreads on money funds versus other fixed-income instruments have helped fuel the growth.

But the popularity of money funds can be traced to the relative stability of the investment and its inherent short-term nature.

Money funds are managed to maintain a value of $1 per share. And unlike the case with insured certificates of deposit, investors can liquidate holdings at any time.

Walter S. Frank, the chief economist for IBC/Donoghue, said liquidity has made money funds the perfect resting spot for cash destined for other investment products.

"There has been a huge influx of dollars into mutual funds and, recently, into the stock markets," said Mr. Frank. "When people move in and out of investments, they have money funds as a natural short-term haven."

He added that the astounding growth of 401(k) plans and other retirement programs has also contributed to the rise of money markets. That's because individuals cash out of the plans and park their assets in money funds before deciding where to invest next.

Kemper's Mr. Harrington said that with more consumers investing these days, many are using money market funds as part of a dollar-cost-averaging plan, where cash is drawn out in regular intervals and invested in long- term mutual funds or securities.

"Other people are using them as part of asset allocation strategies, where a portion of their cash is settled in a money fund to lower the volatility and risk in a portfolio," Mr. Harrington said. "You always hear portfolio managers say they've increased their cash position, and I think a lot of individuals have done that as well."

Brokerage firms too are keeping more cash on hand, now that the Securities and Exchange Commission has shortened the amount of time firms have to settle trades.

The entrance of more banks into the mutual fund business has also made it easier for companies to easily sweep excess cash out of corporate checking accounts into bank-run money funds, said Lee Chase, vice president of brokerage investment products for Norwest Corp.

"We've seen a lot of growth on the institutional side, and yes, it's because of banks," Ms. Chase said. "I suppose the same phenomenon has happened in the retail side, but you just don't see the huge dollar amounts that you do from institutional investors."

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