The Pursuit of Yield

In the aftermath of the 2008 credit crisis, there seemed to be just two options for investing corporate cash – government-issued or government-backed debt – allowing for capital preservation but little to no return. While the purchase of securities issued or guaranteed by the U.S. government continues to remain in favor with many corporate cash investors, the time may be right to look at other investment options to provide additional yield to cash portfolios. We are simply not in the same investment environment we were in during ’08 and ’09 and cash investment strategies should shift accordingly.

On March 31, 2009, six months after the collapse of Lehman Brothers, 99% of our clients were invested in a Treasury money market fund and only held investments in U.S. government or government-guaranteed debt. Today, as conditions in the credit markets improve, our clients are expressing interest in expanding their pursuit of yield through investment strategies that once again include prime money market funds, corporate securities, foreign sovereign debt and asset-backed securities.

The renewed interest in these investment vehicles prompted us to take a look at how our clients’ investment strategies have changed over the past three years. It is hoped that this month’s research, which captures actual portfolio exposures and how those exposures have changed over the last several years, will give treasurers a unique peer group view and will assist them in determining if the time is right to pursue additional yield in their cash portfolios.

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Best Regards,

Ben Campbell
President & CEO