Enhanced Cash Management

Johnston Investment Counsel's enhanced cash management is designed for corporate and institutional clients that have more than sufficient cash reserves to meet operating needs. For these "excess cash reserves", the client wants to maintain a safe and liquid portfolio, but would also like to earn higher returns than certificates of deposit, money market instruments, or Treasury Bills.

First, Johnston Investment Counsel conducts a cash flow analysis to determine how much cash may be available for the enhanced cash strategy. Johnston Investment Counsel examines historical cash balances and cash flows. In creating its portfolios, Johnston Investment Counsel uses a "tiered approach" that includes layering several different maturities and asset classes.

The first tier is designed to meet any unanticipated cash needs. This includes high quality, short-term securities with maturities generally less than 1 year. As the probability of a short-term cash need is reduced, subsequent tiers will invest in short- and intermediate-term bonds, high yield bonds, and, depending on the circumstances, a small allocation to stocks.

 

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