“CORE ENHANCED CASH”

The “Core Enhanced Cash” management product is appropriate for institutional investors seeking a higher rate of return on their short term investments, without sacrificing overall portfolio credit quality, while maintaining a comparable level of risk. This strategy offers a higher yielding alternative to short-term instruments (such as 90 day Treasury bills, money market funds, and short-term time deposits) and permits the use of investment grade fixed income securities generally ranging in maturity from one to eighteen months (determined by client guidelines and/or liquidity needs, etc.).  This will depend upon the shape and slope of the U.S. Treasury Yield Curve which, in the past, has served as an implied forecast of future interest rates and inflation. A higher rate of return, historically appreciably higher, is achieved by tactically over-weighting or under-weighting portfolios with either short maturity investment grade corporate notes or U.S. Agency obligations or some combination of the two.

Credit risk is minimized in a portfolio through the use of widely diversified corporate holdings with the average position size being less than one percent. Each portfolio is separately managed without using leverage or risky derivative instruments.

A “Core Enhanced Cash” management portfolio may, depending on the U.S. economy, market conditions, and investment opportunities, be invested in up to two-thirds of the market value of the portfolio, at any given time, in short maturity, investment grade corporate notes and/or U.S. Government agency notes.

This strategy has typically resulted in providing much higher yields than money market funds, short-term Treasuries, etc. while offering a comparable level of risk.

The fixed income management team at WCB seeks to add value to a portfolio through multiple management tools and tactics including:

  • Proprietary Credit Research
  • Maximization of Corporate Bond Spreads over Treasuries
  • Yield Curve Management
  • Volatility Analysis
  • Duration Management

Each portfolio is customized and managed separately and in accordance with the investment policies and guidelines as determined by the client.