2015 PeerView Survey Results - J.P. Morgan Asset Management
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2015 PeerView Survey Results

Changes in 2016 are driving liquidity investors to make moves.

Introduction

Over 400 CIOs, treasurers and other senior decision-makers around the world, representing over 400 unique entities participated in the 2015 PeerView Survey . As investors continue to navigate shifting interest rate environments globally and face regulatory headwinds, the PeerView findings will help gauge their cash investment interests, strategies and decisions in comparison to their peers. The changing environment of short term investments has shown that it has never been more important for financial decision makers to understand how their peers are positioning portfolios for the upcoming changes.

Key Findings
  • Investment in money market funds still strong – Based on the market outlook for next year, 63% of respondents will continue with the same allocation to money market funds, while an additional 20% will increase their allocations. In the U.S., of the respondents who are currently invested in a prime money market fund, 70% intend to still use them when SEC 2a-7 money market rules go into effect next year.
  • Regulatory pressures – Respondents are grappling with a host of regulatory pressures, including SEC Rule 2a-7 reform in the U.S., pending money market fund regulation in Europe and Basel III around the globe. Approximately 50% of respondents report that their banks have encouraged them to move non-operating deposits off the banks’ balance sheet. Almost 40% of participants plan to make changes to their investment policies given the current regulatory landscape.
  • Safety and liquidity remain priorities – As indicated by their choice of investments, survey respondents focus on safety and liquidity: Almost half of global cash assets are still placed in bank deposits. Usage is most prevalent in Asia, where 57% of assets are held in bank deposits, vs. 44% in Europe and 42% in the Americas. Money market funds represent roughly one- third of cash assets in the Americas and Europe.
  • Risk is still a focus – While risk management continues to be critically important, the framework for assessing risk is shifting for many liquidity investors. Negative interest rates in Europe and low rates globally are compelling organizations to re-evaluate their appetite for risk and more precisely calculate their short-term liquidity needs.
  • Search for yield – Separately managed accounts (SMAs) - customized portfolios that allow investors to define their own risk, security and liquidity parameters - will continue to account for a significant share of cash allocations. 20% of respondents in the Americas and 16% in Europe plan to increase their allocations to cash assets that are invested with SMAs or outside managers. Investor demand for SMAs can be seen as a clear demonstration of the need for yield.
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