Cash & Liquidity Management

PeerView℠: Demand for MMFs remains strong as treasurers are concerned about political, credit and default risks

Published: Nov 2019

November 2019

At a time when falling rates have reanimated the cash management challenges across the globe, treasurers are looking more than ever to search for yield that does not come at the expense of liquidity and security. Enter the 2019 J.P. Morgan Global Liquidity Investment PeerViewSM survey, which sheds light on the most prevalent portfolio strategies, liquidity concerns and cash solutions that treasurers use today.

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One top global finding: The most popular investment permitted in policies worldwide is stable net asset value (NAV) money market funds (MMFs) (92%). Bank obligations and U.S. Treasuries were next (permitted by 78% and 62% of respondents’ investment policies).

What short-term instruments do treasurers across the globe expect to add? Stable and floating MMFs were the top answer, followed, to a lesser extent, by ultra-short/short-term bond funds. What instruments do they expect to remove? The top overall answer was non-rated MMFs (5%).

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Rising political risk is the challenge worrying cash investors most (67% globally), including the U.S-China trade war and Brexit. Respondents’ number two investment challenges vary across region – yield curve inversion in Americas (52%), negative yields/returns in Europe (39%), and regulatory changes in Asia Pacific (55%).

Two wind turbines iconGlobally, the use of environmental, social and governance (ESG) screening criteria is up to 20%, and 25% more are likely to start within two years.
Cloud computing iconTreasury management system adoption is also on the rise. Adoption of treasury management systems is up to 61% globally, with the majority using a third-party tool versus developing a platform in-house (42%).
Euro to pound and vice versa iconTo meet the challenge of negative interest rate in EUR- and GBP- denominated investments, European respondents cite term deposits (62%) and ultra-short/short-term bond funds (23%) as top solutions.
Looking up documents iconCash investors in APAC are reviewing their investment policies more often than their peers  elsewhere: Two-thirds of APAC respondents review at least annually (that’s true for 39% in the Americas and 48% in Europe).

Across APAC, Europe and the Americas, the survey took a deep dive with 346 Chief Investment Officers (CIOs), treasurers and other senior decision-makers managing a total USD 1 trillion in investable cash balance.

How do your cash management strategies and solutions compare to these benchmarks? Results differ by respondents’ company market cap, so see our survey for the details: jpmorgan.com/peerview

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