Corporate treasurers have many responsibilities each day and often do not have time to explore alternatives to enhance corporate treasury investment yields. The primary focus is the alignment of goals within the Investment Policy Statement. In today’s low-interest rate environment, corporate treasuries often invest in money market funds, time deposits, treasuries, etc. which provide minimal yield. In addition, some corporate treasuries leave the cash balances with their banks to receive earnings credit. The funds are “safe” and available.
Investments of this type are conventional and have a place within the investment strategy. However, this approach focuses all cash in one bucket for liquidity. Often a company will have excess cash whereby a portion of the cash can be diversified and invested in another bucket, one with a long-term horizon. It is this approach to diversification and having short term and long term funds for investment that we recommend a treasury department consider. Often a company has short term and long term debt, as each has a different purpose and interest rate. There may even be fixed rate and floating rate debt. With this in mind, it is prudent to look at cash and determine the strategy and bucket for the cash.
BeamaLife can address the strategy for investing cash which will provide enhanced returns with no mark to market risk. The company’s excess cash will be more diversified, properly aligned and provide an enhanced yield to the investment portfolio. Let BeamaLife help you discover this yield enhancement strategy. Please call (800) 554-7822 or complete the request for more information form for better corporate treasury investment now.