As investors seek shelter under the wing of money market funds during the current crisis, Tory Hazard, CEO of Institutional Cash Distributors, discusses the relationship between people and the systems that enable them to overcome the toughest obstacles.
Liquidity continues to top treasury’s leading concerns across industry surveys. But especially now, as the downstream effects of the Covid-19 pandemic continue to impact markets, companies are flocking to money market funds (MMFs) as a stable, safe investment.
In the month after the US Federal Reserve first cut interest rates 50 basis points, Institutional Cash Distributors (ICD) saw a 50% increase in MMF inflows (3 March - 3 April), outpacing the industry’s 27% increase tracked by the Investment Company Institute (ICI) during the same period (4 March - 1 April). Interestingly, 6% of ICD’s inflows came from new clients trading MMFs on ICD Portal [a software-as-a-service system] for the first time.
This is noteworthy because it shows two things: first, the underlying integrity of these short-term investments – in spite of the shocks and stresses on the asset class – and second, that more corporate treasury executives, like the rest of the world, are leaning on technology to support their daily work and each other. In fact, it is technology that is bringing to the fore our most important asset of all – our human connection.