Giving clarity to cash
In today’s risk-averse markets, treasurers are looking for more than reassurance that their money is securely invested. They want managers who can prove it.
It is no longer enough for a fund manager simply to list the assets in their fund. Clients want to know about the strategy of a fund. How is a manager looking to add value? What is he or she doing to ensure liquidity? Why is the yield higher, or lower, than that of rival funds? How strong is the credit team supporting the fund manager?
Aviva Investors has led the way with transparent reporting across its market-leading range of cash funds. And we set a precedent with a move from notional constant net asset value pricing to variable net asset value pricing on three of our core cash funds.
The core aim of cash funds
However, better information is only part of the story. Recent market shocks have reminded investors and fund managers alike that the core aim of these funds is to provide a stable and liquid home for cash. This means a renewed focus on the essentials of sound cash investing: finding a diverse range of investments with the highest-quality counterparties, backed by a liquid market with little or no price volatility.
The markets have changed significantly over the course of the credit crisis, which has now stretched over almost three years. The result is that different skills are needed in order to manage credit efficiently.
Ratings from external agencies are a useful starting point, but it takes a well-resourced team of talented and experienced credit analysts with deep understanding of markets to protect client investments fully. Aviva Investors, with a 40-year track record, significant assets under management and the support of the world’s fifth-largest insurance group,* has the pedigree and institutional DNA to deliver.
A cost-efficient portfolio
The latest concept from Aviva Investors is the Dynamic Liquidity Solution. This harnesses four of our independently rated liquidity funds to create a cost-efficient portfolio that can be tailored to each investing organisation.
We will sit down with a client and discuss his cash-flow requirements, agreeing an allocation between the funds. The client retains complete control over his cash. If his needs change, then so can the asset allocation. There are no ties, no expensive legal fees or break clauses.
This represents a simple, cost-effective and transparent option for treasurers who want the security of investing through pooled funds but the flexibility of running their own bespoke portfolio.
* Based on gross worldwide premiums for the year ended December 31, 2008
Colin Cookson – Head of liquidity at Aviva Investors
Appointed in October 2007, Colin is responsible for continuing Aviva Investors’ development as one of the leading UK providers of money market funds, broadening Aviva Investors’ product offering and generating increased business volumes from a wide range of institutional and corporate clients.
Prior to joining Aviva Investors, Colin was a director of business development of the HSBC Global Liquidity business. He has over eight years’ experience in the liquidity fund business. Before moving over to investment management, he held a number of positions with UK and US commercial and investment banks, and spent several years working in New York and Boston. Colin is an Economics graduate.
The opinions expressed are those of Aviva Investors Global Services Limited (Aviva Investors). They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. The value of an investment and any income from it can go down as well as up. Investors may not get back the original amount invested. Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: No. 1 Poultry, London EC2R 8EJ. Authorised and regulated in the UK by the Financial Services Authority and a member of the Investment Management Association. Contact us at Aviva Investors Global Services Limited, No. 1 Poultry, London EC2R 8EJ.
