The panelists stated that rising interest rates, money market fund reform and new bank regulations are making safely managing corporate cash increasingly difficult for treasurers. To measure this impact, the panelists polled the audience to see which short-term investment options corporate treasurers were most likely to consider in the next six months.
Of the cash vehicles cited, the top five were:
1. Separately Managed Accounts: 31%
2. FDIC Insured Accounts: 19%
3. Floating NAV Money Funds: 15%
4. Ultra-Short Term Bond Funds: 14%
5. Direct Investments: 12%
The panelists continued, indicating that Separately Managed Accounts (SMAs) were more appropriate for longer-term balances, while FDIC Insured Accounts were more appropriate for shorter-term balances.
According to Steve Rotella, CEO of StoneCastle Cash Management, "the survey findings are consistent with what StoneCastle has been hearing from treasurers. We have seen a significant increase in demand and interest in our insured cash vehicle, the Federally Insured Cash Account ('FICA®')." FICA is a liquid, structured insured deposit vehicle that strives to provide investors a competitive yield on multi-million dollar deposits backed by the full faith and credit of the U.S. Government. Today over 1,100 institutional entities use FICA® as part of their short-term cash strategy. To learn more visit www.stonecastle.com.
FICA® satisfies the FDIC's requirements for agency pass-through deposit insurance coverage. Program banks in the FICA® network are FDIC-insured "banks" and "savings associations" as those terms are defined in the Federal Deposit Insurance Act. The FDIC Limit is $250,000 per depositor per bank. The NCUA operates the National Credit Union Share Insurance Fund (NCUSIF) to protect accounts at federally insured credit unions up to $250,000. If a participant has cash at any depository institution independently from the FICA® program that is in the FICA® network, then full FDIC insurance coverage on deposits at those institutions may not be received.
StoneCastle Cash Management is not a bank, nor does it offer bank deposits and its services are not guaranteed or insured by the FDIC, NCUA or any other governmental agency. StoneCastle is an investment adviser registered with the United States Securities and Exchange Commission (SEC). For more information regarding the firm, please see its Form ADV Part 1 and 2A on file with the SEC. Registration with the SEC does not imply a particular level of skill or training.
FICA® is a service mark of StoneCastle Cash Management, LLC.
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SOURCE StoneCastle Partners, LLC