Making your cash work harder

The universal rise in interest rates has substantially increased the opportunity cost of investors not properly utilizing their unused cash piles.

Yiannis Mitilineos, Head of Liquidity Management in EMEA/APAC in UBS Asset Management explains why Money Market Funds, forgotten during the low/negative interest rate environment, have become a constant reference point in investor discussions.

Money Market Funds (MMFs) offer safe, attractive market-based returns, combined with diversification benefits and daily liquidity at a single entry/exit point (the fund’s Net Asset Value). The inverted shape of most yield curves means there is little yield, if any, to be added by increasing duration and venturing out of the safety of the regulated world of MMFs.

In our view, liquidity, safety and diversification should be at the forefront of investor discussions with money managers. Portfolio construction, risk management, country and industry specific risks within MMF portfolios as well as the use of derivatives and currency hedging techniques should be closely examined.

At UBS, we believe that an investment in a MMF should be as close, simple and safe alternative to cash as possible.

UBS offers MMFs in different domiciles and currencies including Article 8 SFDR aligned funds and funds with same day settlement (t+0), combined with the ability to provide investors with customized solutions. We work with our clients to determine the right solution for their cash management needs

As a conservative money manager with several decades of experience, UBS places the liquidity and safety of the underlying portfolio first. Money market portfolios are constructed focusing on issuers from countries/industries of the highest credit quality, without the inclusion of securities denominated in currencies different from that of the underlying fund.

UBS is uniquely positioned to serve both European and Swiss domiciled investors with different investment needs and horizons.

For over 35 years, we have been providing flexible, high-quality liquidity solutions to our clients. Whether high net worth individuals or institutional investors, the focus is always the same: deliver solutions that meet a client’s safety, liquidity and yield goals.