9 min readCash may be King, but it is also going virtual before our eyes. Digital cash used to be the domain of tech innovators and cryptocurrency enthusiasts. But if a pair of tokenized money market mutual funds (MMFs) is any indication, instantaneous movement of cash untethered to market hours may be close to reality. If today’s…
18 min readFinancial markets have closely monitored consumers’ financial health following the COVID-19 pandemic to gauge when the exceptional economic tailwind provided by high levels of household savings would fade. Accounting for roughly two-thirds of GDP, consumer spending was juiced by pandemic era stimulus programs which ballooned household savings. These savings were later depleted as post-stimulus inflation…
10 min readAbstract Changing credit landscapes, more complex financial products, multiple touchpoints with large financial intermediaries, and high profile bank failures are just some of the challenges treasury management professionals and cash managers face in counterparty risk management. An effective counterparty strategy should provide clarity on the counterparties’ credit strength individually and collectively, and have a desired…
15 min readAbstract BBB-rated debt continues to offer new possibilities for cash investors. Although it involves taking on incremental credit risk, allowing purchase of these securities can help alleviate supply shortages while also offering additional return opportunities. Should investors look into adding BBB names to their portfolios, we recommend that they follow these principles. Guiding Principles: Introduction…
16 min readCo-Authored by Pate Campbell, Analyst CFA Managing the Risks Posed by Tightening Financial Conditions DOWNLOAD REPORT Executive Summary Financial conditions are tightening, primarily as a byproduct of the Fed’s interest rate hiking cycle. This portends that households and businesses may be less supportive of economic growth than they have been in the post-Covid period. Households…
4 min readWhat is an Investment Policy Statement (IPS)? Investment Policy Statements (IPS) are written directives provided by investors to their investment managers that defines the objectives, policies, and guidelines governing the management and oversight of their portfolio. An IPS serves as an essential tool in dictating how an investor’s portfolio should be managed. An IPS should…
7 min readCash investors looking to incorporate ESG face an interesting dilemma: Can you invest in oil majors while claiming to be an ESG investor? The answer may surprise you. Part 1: A Recent History of Energy The prominence of ESG investing has increased significantly in recent years, and nowhere has its impact been felt more than…
11 min readIntroduction The acquisition of Silicon Valley Bridge Bank’s (SVBB) loans and deposits from the FDIC by First Citizens Bank (FCB) resolved a major uncertainty for customers and depositors of the failed Silicon Valley Bank (SVB). The transaction allowed the FDIC to move on from the second largest bank failure in US history. SVB customers and…
2 min readIntroduction The single biggest credit risk for institutional cash investors lies in the large uninsured deposits they leave at their operating banks. Particularly at risk are uninsured balances at banks with less diversified business profiles and aggressive risk cultures that expose depositors to the risk of a bank run, which is difficult to predict and…
10 min readCo-authored by: Spyros Qendro, CFA®, and Carter Bourassa DOWNLOAD FULL REPORT Abstract In an environment characterized by limited forward visibility, it’s more crucial than ever for cash investors to understand the landscape and the risks and opportunities it creates. In this paper, we will evaluate what makes a successful cash management strategy while underscoring the…