Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Michael Kim - Sandler O’Neill.
Michael Kim - Sandler O’Neill
First, in terms of the money market funds, it sounds like some retail investors are increasingly turning to bank deposits to maybe earn some higher yields. I know it's difficult for you to kind of see exactly where some of the money is going, but do you get a sense that you're losing market share there, or are you not really impacted all that much, just given your client base?
J. Christopher Donahue
Given the client base, as you say, it's difficult to see that exactly. I suspect there is some modest movement, because it is true that retail investors are going from some money market funds into MMDAs with higher yields. But the institutional base of our business is a cash management service that really isn't as much influenced by that. And so we just don't see it the way that others do. Not that it's not true.
Michael Kim - Sandler O’Neill
And then to transition to the institutional investor base, it seems like a lot of investors have yet to make any big moves in terms of rebalancing their portfolios. Where do you think we are in that process and is it possible that we see another step up in redemptions across the industry when, in fact, that does happen?
J. Christopher Donahue
It's very difficult to predict and it's also very difficult to predict how that will be influenced by moves by the Fed, whenever that would occur. So we would just be more or less speculating on our view of where the market is going to go. We would expect that you would continue to see redemptions, net redemptions, in these money funds at this point, but to a modest extent.
And that's why I mentioned in my remarks that even though the money fund assets were down by $28.0 billion during the quarter, we are still up over $30.0 billion from the prior year. And it's just to try and give a sense of balance and long-term movement that, yes, there is movement but the long-term efficacy of the cash management business remains intact.
Perhaps Debbie has a futuristic view of this, different than what I've said.
Deborah A. Cunningham
I think anything I've heard is obviously it's a cyclical business. When rates are declining and stable, for the most part we're gathering assets in the money fund industry. On the other side of the equation, when the interest rates do start to go back up again, the likelihood of a decrease in assets is what has been seen in past history.
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