Money market funds posted another asset record last week, with $5 billion pouring into their portfolios.

During the week ending July 19, these funds - which are a core bank investment product - held $722.46 billion, a 0.6% jump over the preceding week, according to the Investment Company Institute.

The growth in assets was powered by flows into retail funds, which held $503.78 by week's end. Assets in taxable retail funds grew by $4.73 billion, to $403.57 billion, while tax-exempt retail funds increased by $58 million to $100.21 billion.

Walter Frank, the chief economist with the IBC Money Fund Report, said that retail investors have flocked steadily into money markets in recent months as yields have come close to matching those of much riskier long- term funds.

However, institutional money funds, which held $218.68 billion last week, faced a slight outflow as professional investors began searching for better opportunities following the Federal Reserve's decision to cut the federal funds rate by 25 basis points two weeks ago, Mr. Frank said.

"In the weeks following a Fed rate cut, the money begins to flow out of institutional funds because fund rates begin to approach the open market rate," he said.

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