SunGard has completed its third annual cash management study, which highlights increased use of money market funds and independent portals as companies seek to operate smarter and unlock trapped cash in regulated markets, while finding suitable repositories for large cash balances. Based on responses from more than 160 corporations globally, the study examines corporate treasurers’ changing attitudes toward cash investment over the last 12 months, including strategic cash holdings, asset allocation, investment policies and transaction execution.
Survey participants responded on behalf of treasury centers located in North America (47 percent), Europe (32 percent), the Middle East and North Africa (6 percent), Asia (5 percent), and Africa and Central, Eastern and Southern Europe (10 percent). Key findings of the report include the following:
- Forty-three percent of companies increased the amount of surplus cash held¾up from 37 percent in 2012
- Since 2012, the proportion of companies holding cash in short-term money market funds (MMFs)¾typically constant net asset value (NAV), AAA-rated MMFs¾has risen from 40 to 52 percent, although the share of cash companies held in these MMFs has decreased from 50 percent to 44 percent
- Although the percentage of companies invested in variable NAV MMFs remained steady since last year, corporate investors increased their share of cash held in these MMFs from 36 to 44 percent
- A dramatic reduction in the use of telephone transactions for short-term investments has taken place, from 51 percent in 2012 to 30 percent in 2013
- The preference for independent portals over proprietary bank portals has reversed since 2012, with 35 percent preferring independent portals¾an increase of 15 percentage points
“Managing risk has become a growing priority from an operational perspective. Companies are increasingly recognizing the advantages of electronic trading, as well as independent price discovery and execution with multiple counterparties through a single channel.” – Vince Tolve, vice president, SunGard’s brokerage business
The SGN Short-Term Cash Management portal is a global, multi-fund trading platform that helps corporate treasurers increase efficiency in researching, analyzing and gathering relevant information to help optimize short-term investment strategies.