1 min readAs strategies to deal with money fund reform move to the forefront for many treasurers, the landscape for money fund alternatives has evolved significantly. One of the largest factors impacting alternate investment strategies has been the supply contraction of high-grade securities rated AA or higher. Gone are the days when a cash portfolio could be…
2 min readExecutive Summary The most compelling argument for total return strategies is demonstrated by a difference of 1.17% in annualized returns between the 1-month and the 1-3 year Treasury benchmarks in the 2005-2014 period. The return difference translates into $13.9 million for a hypothetical investment with a starting value of $100 million. Even though neither of…
1 min readAbstract Greater vigilance is required of today’s treasury investment professionals. Neither bank deposits nor money market funds may be appropriate in the post-crisis, post-regulatory environment. As yields start to rise, cash investment strategy decisions that may have been delayed will require serious consideration. Direct purchases in separately managed accounts may become the primary alternative cash…
2 min readExecutive Summary The complementary use of commingled and separate accounts may help in optimizing corporate cash management. The percentage of corporate investors considering money market funds as permissible investments has been declining since 2009, while the permissible use of separately managed accounts has been climbing. Six Advantages of Separately Managed Accounts: Tailored Risk Management Transparency…
2 min readAmong the most interesting statistics in the 2015 AFP Liquidity Survey from the Association for Financial Professionals (AFP) is that 52 percent of corporate treasurers are considering use of separately managed accounts (SMAs) as a response to the 2016 reforms that will change the nature of institutional money market funds. That finding may come as…
1 min readSurvey goal To shed light on treasury departments’ efforts to mitigate liquidity risk in short-term cash investment, debt and forecasting practices and changes over time. What we’ve learned in 2015 Treasury and financial professionals appear to have begun to control bank exposures Decrease in bank deposits Survey results indicate while Money Fund usage is down…
1 min readWith sweeping changes coming to short term cash markets, along with a likely Fed policy shift, now is the time for a bottom-up reevaluation of cash investment strategies. Regulatory changes are altering the risk-reward relationship of the most staid solutions in cash markets, as old products are reinvented and new ones introduced. It’s been over…
2 min readFebruary brought a string of announcements from several of the largest money fund managers in the country detailing new investment strategies in response to the money fund regulatory overhaul announced by the SEC in 2014. These announcements gave clarity to the changing utility of money market funds and outlined how the investment landscape will be…
2 min readAbstract As large money market fund sponsors begin to release their new fund directions, the wait may be over for cash investors to get their own strategies in place. The recent announcements allow us to gauge different paths forward for the industry and help investors gain insight into what to expect. Among a lineup of…
1 min readAs we transition into a new year, I reflect on 2014 as a year of steady but slow economic progress. Continued improvements in the labor markets moved the U.S. closer to the self-sustaining economy the Fed is targeting. Quantitative easing ended quietly while the U.S. equity markets continued their march upward, adding to an improved…