Strategy overview
The US Government Cash Management strategy invests in US Government securities including US Treasuries, agencies and mortgage-backed securities backed by US agencies. Performance is typically measured against the Citigroup 3-Month T-Bill Index with the overall duration generally kept between +/-10% of the duration of the benchmark.
We believe a well-constructed diversified portfolio managed within an active risk framework will enhance consistent income with low volatility
- Duration Range: 0-270 days
- Maturity Range: 0-13 months
- Investment Universe: US Treasury, Agency, Agency guaranteed obligations
- Credit Quality: AAA, fully customizable
Our approach
Investment process
We believe the essential role of cash management is to control and manage risk. Our investment objectives are safety, liquidity, and yield—in that order of importance. We endeavor to deliver superior absolute and risk-adjusted returns in the long term. We actively manage portfolios within our risk management framework to protect principal while providing appropriate liquidity and value-added returns. We emphasize income as the primary source of returns by constructing broadly diversified portfolios with targeted duration and by using an extensive credit review and valuation process for security selection.
- Thorough understanding of the issuer, credit and debt structure
- Focus on security selection and curve exposure while actively managing duration, call and extension risk
- Invest in out-of-benchmark sectors when expected return justifies the opportunity
- Avoid making large duration calls
Risk management
- Mandate and policy controls
- Full, multidisciplinary vetting of client policies and objectives
- Multiple levels of review
- Clear accountability and cross checks
- High quality focus reduces credit risk