Cross-Sector

Capital Advisors Group’s Comments on the Recent Money Market Fund Reform Proposal by the Securities and Exchange Commission
September 3, 2013May 31, 2024 Investment Management

2 min readSummary Opinion Institutional Shareholder Perspective: We commend the Commission for tackling the tremendous task of analyzing mountains of data before putting forth the reform alternatives for public comment. We seek to weigh in on the subject from the perspective of an institutional asset manager. Penny Rounding for Shareholder Activities: We support the mandatory daily disclosure…

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Changing Investment Landscape
July 1, 2013May 24, 2024 Credit & Risk

1 min readEach January our newsletter focuses on the likely challenges that cash investors will face in the coming year. Given how much has transpired in the treasurer’s world since the beginning of 2013, we thought that an update on the issues facing cash investors would be helpful. On June 5th the SEC voted unanimously to propose…

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Issues and Trends in Money Markets
July 1, 2013May 16, 2024 Credit & Risk

2 min readAbstract As we recap market developments in the first six months of 2013 and look to the future, we reflect on the following five observations from a recent liquidity conference: Low yield environment turning the corner; Corporate cash balances up, investors less worried; Supply still constrained, but more issuers entering the market; New money market…

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Counterparty Risk Management for Corporate Treasury Functions
June 3, 2013May 31, 2024 Credit & Risk

2 min readAbstract Experience has taught us that even seemingly strong counterparties can fail without warning. Counterparty risk management has become more challenging in recent decades due to concentrated exposures, complex financial instruments and deteriorating bank credit. Corporations should manage risk proactively, have an integrated risk policy across business lines, diversify risk by setting exposure limits according…

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The End of an Era
May 1, 2013May 24, 2024 Credit & Risk

1 min readIdentifying credit trends and translating these trends into risk management practices, whether in the management of a buy list or in the management of counterparty risk, is a key function within treasury departments. The negative trends in bank ratings we discussed more than a year ago, “Bank Ratings Headed for BBB, How the Megatrend May…

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Targeting Consistent Risk Tolerances
April 1, 2013May 16, 2024 Credit & Risk

1 min readThis month I attended a client’s audit committee meeting to review cash investment strategies and an interesting question was raised; the treasurer asked if it was time to start evolving their risk tolerance away from a Government-only strategy. This was a provocative question and one that we hear frequently these days. Although this particular company…

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Applying Constant Risk Aversion to Cash Investment Management
April 1, 2013May 31, 2024 Credit & Risk

2 min readAbstract In this paper, we discuss the concept and benefits of constant risk aversion in cash portfolio construction. The process may help treasurers understand, gauge and rationalize investment decisions to achieve consistent risk characteristics and to avoid the whiplash that can result from drastic pendulum swings between high-risk and no-risk. The Need for a Constant…

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A Floating Net Asset Value Substitute
February 1, 2013November 4, 2025 Investment Management

2 min readExecutive Summary We believe that mandatory disclosure of daily market value NAVs will be a significant step toward better risk transparency in money market funds. It is functionally equivalent to the FSOC/SEC’s floating NAV proposal without the unnecessary operational, accounting and tax complexities. When applied along with objective liquidity gates and/or reasonable NAV buffers, the…

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Three Challenges for Corporate Cash Investors in 2013
January 2, 2013May 31, 2024 Investment Management

2 min readAbstract We have identified the acceleration of money market fund reform, the scarcity of eligible investments and the threat of negative yield as three challenges facing corporate treasury professionals in 2013. Our recommendation remains the same as found in previous research – consider a separately managed account as a defensive measure against regulatory uncertainty, supply…

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Diversifying Money Market Fund Risk with Separately Managed Accounts
October 1, 2012May 31, 2024 Investment Management

2 min readExecutive Summary The use of separate accounts to complement money market funds (MMFs) may help optimize risk and reward trade-offs in corporate cash management. The investments of time and research in establishing a separate account relationship may bring just rewards in times of uncertainty. Separate Account Simulator™ Results: A 50/50 portfolio of 60-day WAM may…

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Cross-Sector

Capital Advisors Group’s Comments on the Recent Money Market Fund Reform Proposal by the Securities and Exchange Commission

Issues and Trends in Money Markets

Counterparty Risk Management for Corporate Treasury Functions

Applying Constant Risk Aversion to Cash Investment Management

A Floating Net Asset Value Substitute

Three Challenges for Corporate Cash Investors in 2013

Diversifying Money Market Fund Risk with Separately Managed Accounts

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