Seeking Higher Returns On Corporate Cash.
Johnston Investment Counsel’s enhanced cash management programs seeks higher returns than money market and/or certificate of deposits while maintaining high degrees of liquidity to meet unanticipated cash needs.
We conduct a cash flow analysis to determine how much cash may be available for the enhanced cash strategy. We examine historical cash balances and cash flows. And finally, use a “tiered” approach to portfolio construction that includes several different “layers” of maturities and asset classes.
The first tier is designed to meet any unanticipated cash needs. This typically includes high quality, short-term securities with maturities generally less than 1 year. As the probability of a short-term cash need is reduced, subsequent tiers may invest in short- and intermediate-term bonds, and high yield bonds. Depending on the circumstances, a small allocation to stocks may also be included.