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Survey shows increasing cash reserves and investment in MMFs by corporates

SunGard survey into the corporate treasury professionals' changing attitudes toward cash investments driven by economic, regulatory and risk concerns, following a similar survey in 2011, revealed considerable changes.

Responses were collected from more than 200 corporations globally across a wide range of industries, and about 20 percent representing financial institutions. More than 50 percent of respondents were from companies headquartered in North America, 32 percent in Europe, and the rest in the Asia-Pacific region. More than 70 percent of participating companies had annual revenues exceeding $1 billion.

Key findings of the report include the following:

  • some companies are growing their cash reserves, with 37 percent of companies increasing the amount of surplus cash over the past twelve months
  • companies are holding an increasing share of their cash investments in MMFs: an average of 50 percent of their cash in these funds -- representing an increase of more than 11 percent from 2011
  • although just 9 percent of companies surveyed invest in MMFs that have a variable net asset value (NAV), these companies hold an average of 36 percent of their cash in these instruments, compared to only 4.5 percent in 2011 -- reflecting a change to an investment strategy more in line with regulatory preference for variable funds
  • 43% of respondents said they use an online trading portal for cash investments -- an increase of 6 percent over 2011.

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Investing Short-Medium Term Surpluses
Money Market Fund Investing
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