Cash has absorbed more capital than any other asset class
Published 16 February 2026
The most structurally important asset class of the past 25 years has not generated growth, income or inflation protection. That's why this chart matters. It shows that this asset class has absorbed more consistent capital than any other. It is not equities, bonds or gold. It is cash.
Cumulative inflow data from EPFR and Bank of America shows that since the early 2000s, money market funds have absorbed more capital than any other asset class.
The reflex explanation is a wall of money waiting to rotate into risk once rates fall. That reading misunderstands what money market assets actually represent.
A large share of these balances is structural. They reflect corporate treasury management, regulatory liquidity requirements, collateral frameworks and the balance sheet conservatism that followed 2008. Basel III embedded a permanent demand for liquidity across the banking system.
The Bank of America fund manager survey makes this clear. Professional portfolio managers are running near record-low cash levels. The risk-taking capital is already invested. The expansion in cash is taking place in corporate treasuries and liquidity mandates.
What distinguishes today from the turn of the millennium is that liquidity has become a core operating requirement of the financial system. The post-2022 rate cycle did not create that demand. It simply made holding liquidity economically attractive again.