Annual J.P. Morgan Global Liquidity Investment PeerView 2014
The J.P. Morgan Global Liquidity Investment PeerView Survey examines the investment decisions of liquidity investors around the world. The 2014 edition surveyed over 300 people—each and every one a senior decision-maker—representing more than 300 unique entities and all sectors of the global economy.
- Liquidity is still key: Liquidity is a central concern of survey respondents. Half of global cash assets are placed in bank deposits. Money market funds account for over one-third of cash assets in the Americas.
- Risk remains a focus: The majority of respondents’ investment policy statements define portfolio duration and credit standards for both longer- and shorter-term securities.
- Regulatory change is a concern: A majority of respondents plan to stay the course with their current cash allocation through 2015.
- Cash balance size and diversification: Firms with larger cash balances have a broader set of investment guidelines. A third or more of larger firms permit investment in asset-backed securities or mortgage-backed securities.
- Search for yield: Separately managed accounts account for a significant share of cash allocations.
- Manager selection: The top three criteria in order of importance are performance/risk adjusted returns, investment expertise and firm relationships
Are your cash investment practices aligned with your peers?
Market and regulatory forces will present challenges, as well as opportunities, to liquidity investors as they re-evaluate their cash investment decision-making. This process—always important, never simple—will greatly benefit from a peer comparison as firms consider how their policies and practices resemble, and differ from, their peers. In this regard, the J.P. Morgan Global Liquidity Investment PeerView Survey can serve as a valuable industry benchmark.