Cash managers need to be proactive to preserve principal and earn yield, especially with policy interest rates so low. We explain strategies and investment vehicles that seek greater return while managing risk and liquidity.
As financial markets tumbled at the onset of the pandemic, fear and a precipitous decline in economic activity unleashed a dash for cash. Consideration needs to be given, ensuring money market funds continue to play their role.
From protests to forest fires, from a pandemic to economic disruptions, 2020 forced meaningful changes in the way companies, and treasuries in particular, work. In the face of all of this, cash remained remarkably strong. Looking ahead to 2021, we expect underlying factors — low interest rates, a continuing transition toward ESG, shifting policy frameworks and the shift away from LIBOR — to continue to shape the global cash market well into the new year.
This information is for informational purposes only, not to be construed as investment advice or a recommendation or offer to buy or sell any security. Investors should always obtain and read an up-to-date investment services description or prospectus before deciding whether to appoint an investment manager or to invest in a fund. Any views expressed herein are those of the author(s), are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may make different investment decisions for different clients. There are no guarantees regarding the achievement of investment objectives, target returns, portfolio construction, allocations or measurements such as alpha, tracking error, stock weightings and other information ratios. The views and strategies described may not be suitable for all investors. SSGA does not provide tax or legal advice. Prospective investors should consult with a tax or legal advisor before making any investment decision. Investing entails risks and there can be no assurance that SSGA will achieve profits or avoid incurring losses.
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