Rise Above Rates

Rising Rates and Cash Management

Capital preservation and liquidity are crucial for investors regardless of the direction of interest rates.

Portfolio manager Jerome Schneider explains why in this interest rate cycle, those seeking capital preservation may need to look beyond traditional cash investments.

For investors looking to have a lower volatility profile, PIMCO believes that short duration strategies are an appealing choice, especially as we approach a higher rate environment.

  • With the advent of money market reform measures on 14 October 2016, we anticipate a change in dynamics for money market funds.
  • Unlike what we’ve seen in previous Fed tightening cycles, we do not expect money market yields to recalibrate higher as the Fed raises interest rates. They’re going to remain more subdued.
  • This means that investors will need to look beyond the confines of a typical money market mandate for yield opportunities.

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