After multiple interest rate increases since March 2022, institutional cash investors are welcoming higher returns but wary of the possibility that an economic slowdown or recession might increase credit risk in their portfolios. Watch our latest Quarterly Cash Update for insights and perspective on this uniquely challenging investment environment.
“When we talk to clients and prospective clients, the conversation about taking a strategic approach to cash management is at the forefront,” says moderator Ray Facinelli, EVP and Director of Business Development, adding that Capital Advisors Group experts provide a 360-degree perspective:
- Anthony Cucinotta, Head Trader, notes that early signs of inflation moderating may prompt the fed to slow the pace of interest rate hikes, with the possibility that rates may top out sometime in 2023. And while demand has increased for short-term cash investments from investors seeking higher returns, he is still seeing liquidity in the market for buyers and sellers.
- Kate Ryan, Senior Portfolio Manager, says that interest rates on bank deposits are no longer as advantageous as other short-term cash investments, adding that “We are seeing a number of clients and prospects shift their asset allocation from deposits to separately managed accounts.”
- And Lance Pan, CFA, Director of Investment Research and Strategy, says higher rates and the possibility of a business slowdown have created new credit risks, especially among non-financial borrowers. But diversification and investment in high-quality credits can reduce risk while positioning your portfolio for higher returns.
At Capital Advisors Group we have spent more than 30 years advising institutional cash investors on how to manage portfolios that provide liquidity, risk, and targeted returns. Our latest Quarterly Cash Update is only the most recent example of the kind of depth and breadth of counsel we provide to cash investors every day.