Cash management is a key component of any sound financial strategy. Traditional savings accounts offer inadequate returns (especially in low interest rate, high inflation climates), leaving many in search of smarter ways to earn from their cash while maintaining flexibility.
This is where cash management portfolios come in, offering a solution that better balances safety and returns while ensuring liquidity. Because of the high quality and shorter maturity nature of the underlying securities, these cash solutions can ensure high liquidity, very low risk and a rate of return close to inflation
However, not all cash management solutions are created the same. We have seen a proliferation of cash management solutions in the market that sometimes advertise very high headline returns in order to attract clients. However, these products come with additional risks because they tend to allocate part of their investments to short duration bonds, which come with additional duration and credit risks....