14 min readDOWNLOAD FULL REPORT Abstract The popularity of responsible investing has extended to the fixed income and liquidity management fields in recent years. Incorporating environmental, social and governance (ESG) issues in cash investment decisions makes sense as part of overall credit risk management. In addition to challenges related to disclosure, criteria, measure and verification, liquidity portfolios…
17 min readDOWNLOAD FULL REPORT Abstract The 2014 money market fund reform brought forth drastic change to the corporate cash management landscape, significantly impacting investors, issuers and fund sponsors. While there is little doubt that money market funds are more resilient following the implementation of the reform’s higher credit, liquidity, transparency, and oversight standards, it also had…
13 min readDOWNLOAD FULL REPORT Abstract The March Federal Open Market Committee (FOMC) decision was a major market event that directly resulted in an inverted yield curve. The Fed’s interest rate and growth outlook change echoed other recent moves by central banks that may indicate the end of a tightening monetary cycle. The inverted curve may be…
20 min readDOWNLOAD FULL REPORT Abstract As the post-recession credit cycle matures and a period of historically low interest rates ends, investors are paying increased attention to the rise of corporate leverage. Companies have borrowed heavily in the past decade to fund M&A activity and investor payouts. This has resulted in significant growth in BBB-rated debt for…
14 min readAbstract We have identified the Fed and a flattening yield curve, trade wars and a global slowdown, and Brexit and other uncertainties as the three main themes to watch in 2019. Compared to 2018, we think 2019 will be a bit more challenging for short-term liquidity investors. A flatter yield curve may attract more non-traditional…
5 min readFollowing the collapse of Lehman Brothers in 2008, the rapidly deteriorating economic environment in the U.S. and abroad caused most treasurers to reevaluate their cash investment strategies, with a specific focus on restricting investment in certain asset types. Some companies implemented these restrictions by changing their investment policies, while others simply gave instructions to their…
4 min readAbstract For institutional cash investors unsure of separately managed accounts in a rising interest rate environment, our scenario analysis suggests that a laddered portfolio of agency and corporate securities with a modest WAM could outperform the government money market fund proxy with negligible unrealized loss concerns. Both agency and corporate portfolios with maximum maturities of…
4 min readAbstract Jerome Powell is the new Chair of the Federal Open Market Committee (FOMC) following Janet Yellen’s retirement from the Fed. In the near-term, Powell is likely to continue on the projected path of gradual interest rate hikes while also focusing on transparency and deregulation. However, as his background is not in economics, he will…
2 min readAbstract The return of yield opportunities presents institutional cash investors with fresh challenges. Higher rates have driven up the cost of staying with ultra conservative instruments. Money market fund reforms have left corporate cash managers with few clear choices to add yield. And historically popular cash vehicles that have undergone significant changes demand a fresh…
3 min readWhen the Fed raised interest rates last December for the first time since 2008, many corporate cash investors who had lived through previous tightening cycles expected a series of increases through 2016. But worldwide turbulence in equity markets in the first quarter, additional easing by central banks overseas, and ongoing uncertainty about the U.S. economy…