2 min readInvestment Considerations We think there may be a shorter than expected timetable for Fed rate hikes and that it may be prudent to keep a portfolio of shorter maturity bonds and floating rate securities. This strategy also applies to money market funds with shorter weighted average maturities (WAMs). We believe yield levels may rise causing…
3 min readOver the past two years, as we anticipated the credit cycle downturn, we gradually and methodically worked to reduce credit exposure in our managed portfolios. In light of the dramatic capital markets disruptions and the extreme market illiquidity after the bankruptcy of Lehman Brothers, we temporarily ceased purchases of all non-government guaranteed debt. Additionally, we…
2 min readExecutive Summary This update to our original whitepaper published in April 2006 seeks to answer two questions: 1) Are prime funds getting safer? 2) Are all prime funds alike? The general risk profile of the large prime fund group has improved since our last publication. The average fund now has better liquidity, better credit quality…
2 min readExecutive Summary We set out to answer 10 of the most common questions related to investment policy statement writing for cash portfolios. In doing so, we will provide a number of peer group data comparisons to further add helpful insight in the process. The questions address the following investment subjects: Maximum liquidity limits Minimum credit…
3 min readConfession: This eye-catching title is not our invention. It is borrowed from a panel discussion on money market fund distribution strategies held at the Crane Data Money Fund Symposium in Providence, RI in late August. We, however, think it brings out a salient point – growth for growth’s sake can be a recipe for disaster….
2 min readFederal Reserve Chairman Ben Bernanke recently laid out his plans to lawmakers on how the Fed will eliminate programs, when needed, which pumped hundreds of billions of dollars into the financial system. In an op-ed piece for the Wall Street Journal, he wrote that the strategy is ready to be put to use, but noted…
2 min readOn June 24, 2009, the Securities and Exchange Commission (SEC) announced the long-anticipated proposed amendments to the 2a-7 rule that regulates money market mutual funds. The proposed changes were prompted by the extraordinary events in the money fund industry that took place after the Reserve Primary Fund’s net asset value (NAV) dropped below a constant…
3 min readAs signs of stability returned to capital markets in recent weeks, we’ve begun to hear investors inquire as to how to improve yield in their cash portfolios. We acknowledge that, first and foremost, the return of risk appetite is a welcome and healthy sign after a period of frozen credits and a crisis of confidence….
2 min readAs a treasurer or a CFO, what would your reaction be if you were presented with the following description of a cash investment option? It’s a structured fixed income product sold as equity without a stated maturity date. It makes no commitment to daily liquidity, nor does it guarantee principal protection and it pays a…
2 min readExecutive Summary Tip No. 1: In a market that lacks liquidity, CPFF means liquidity. Tip No. 2: When a firm can no longer access CPFF, liquidity may deteriorate rather rapidly. Tip No. 3: Despite the appearance to the contrary, not all CPFF-eligible issuers are the same. Tip No. 4: CPFF eligibility and credit ratings are…