Reallocation Out Of Cash

From Barclays Capital's Asset Allocation report dated Sept 24: "The environment of near zero interest rates means that savings are being slowly forced out of cash and into riskier asset classes. Around $350bn has left US money market funds this year, while $185bn has moved into equity, bond and hybrid mutual funds. Roughly 2/3 of the reallocation out of cash has headed into bond and credit funds. This move out of cash into riskier assets represents just 23% of the $1.5trn flight into cash that occurred over the 2007-Q1 09 period. As such, the remaining volume of savings that remain in near-zero yielding cash offer a considerable potential fuel for a continued rally in riskier asset classes."