Cash & Liquidity ManagementAdoption of TMS continues to rise: 2019 Global Liquidity Peerview Survey

Adoption of TMS continues to rise: 2019 Global Liquidity Peerview Survey

J.P. Morgan has released its Global Liquidity PeerView Survey, revealing that demand for money market funds remains strong in the late-cycle. The survey features responses from 346 CIOs, treasurers and other senior cash investors around the world, representing an approximate combined cash balance of USD $1 trillion.

Demand for money market funds is still strong, adoption of treasury management systems continues to rise, and more investors are incorporating environmental, social and governance (ESG) criteria to screen investments, even as the market outlook continues to evolve, according to the J.P Morgan Asset Management 2019 Global Liquidity Peerview Survey.

The 2019 Global Liquidity PeerView Survey features responses from 346 CIOs, treasurers and other senior cash investors around the world, representing an approximate combined cash balance of $1 trillion.

“The changing global economic environment presents investors with many new challenges, from slowing growth, rising trade tensions, and falling interest rates,” said Paula Stibbe, Global Head of Liquidity Sales, J.P. Morgan Asset Management.

“This year’s PeerView results suggest that in this environment, demand for money market funds remains strong, and investors with short-term fixed income portfolios are increasingly looking at areas such as ESG screening and treasury management systems when evaluating their cash investment strategy.”

Key themes

Four key themes were identified in the PeerView survey:

  • Demand for money market funds (MMFs) is still strong: MMFs remain the most permissible investment (in 92% of investment policies), followed by bank obligations (62% of policies) and U.S. Treasuries (60%). Most survey respondents (75%) plan to maintain their stable NAV MMFs, based on the market outlook for the coming year.
  • ESG investments are on the rise: Investors are increasingly turning to responsible investing, using ESG criteria to screen investments. 19% of respondents globally are doing so now, and an additional 25% are likely to start within the next two years.
  • Adoption of treasury management systems is increasing: The percentage of investors surveyed using such systems is now 61%. The features used most are cash management and treasury accounting (98%), investments and debt management (67%) and FX and interest rate risk management (50%). Asia Pacific (APAC) investors are more likely to develop in-house systems (43%) than use third parties; in the U.S., only 12% and in EMEA 11% developed their systems in-house.
  • Investors are eyeing rising political risk: Rising political risk tops the list of investment challenges, with 67% of respondents expressing concern about the U.S.-China trade war and Brexit.

Europe and Asia-Pacific

The survey also highlighted several key themes across Europe and Asia-Pacific:

Europe – The search for yield and return Term deposits continue to be the most popular investment solution to avoid negative interest rates in EUR- and GBP-denominated investments (62%), followed by ultra-short duration bond funds (23%).

Asia Pacific: Regulatory change weighing heavily – After political risk, 55% of APAC respondents cite regulatory change their top investment challenge. 22% cite rising credit and default risk in China as a concern—far more than peers in other regions. APAC investors review their investment policies more frequently (66% at least annually) than respondents elsewhere.

J.P. Morgan Asset Management’s PeerViewSM is a program that provides a unique opportunity for firms to compare their cash investment practices to those of their peers globally, allowing clients to evaluate variances and opportunities in cash investment policies and practices.

View the full findings of the report here.

 

Related Articles

Efficiency through technology the top priority for treasury leaders

Cash & Liquidity Management Efficiency through technology the top priority for treasury leaders

1m Jay Ashar
UX design for cash management

Cash Management Regional UX design for cash management

1m Shaahin Mohammadi
Is the sustainable finance focal point Asia-bound?

Asia Pacific Is the sustainable finance focal point Asia-bound?

1m Jay Ashar
Justin Meadows joins FXD Capital as Non-Executive Director

Cash & Liquidity Management Justin Meadows joins FXD Capital as Non-Executive Director

2m Jay Ashar
The ESG needle is moving and treasurers must react

Financial Supply Chain The ESG needle is moving and treasurers must react

3m Aaran Fronda
GTreasury enables automatic execution of trade for Jemena

Business Partnership GTreasury enables automatic execution of trade for Jemena

3m Jay Ashar
GTreasury and Goldman Sachs enter into a connectivity agreement

Liquidity GTreasury and Goldman Sachs enter into a connectivity agreement

3m Jay Ashar
Goldman Sachs launches Sustainable Finance Group

Corporate Treasury Goldman Sachs launches Sustainable Finance Group

4m Jay Ashar

Whitepapers & Resources

Transaction Banking Survey 2019

Transaction Banking Survey 2019

2m
TIS Sanction Screening Survey Report

Payments TIS Sanction Screening Survey Report

4m
Enhancing your strategic position: Digitalization in Treasury

Payments Enhancing your strategic position: Digitalization in Treasury

6m
Netting: An Immersive Guide to Global Reconciliation

Netting: An Immersive Guide to Global Reconciliation

9m