Cash & Working CapitalInvestment Management

Counting Cash: Many Companies Will Maintain or Up Cash Levels in H1

By March 11, 2021No Comments

An ICD survey also shows steady and growing use of money market funds and higher interest in ESG products.

Cash on corporate balance sheets reached a record in 2020, topping $2 trillion, as companies responded to economic uncertainty created by the pandemic. New data from money market fund portal ICD suggests that a majority of corporates do not plan to cut cash levels in the first half of 2021.

  • 61% of the 150 treasury clients surveyed by ICD plan to maintain or increase their cash balances in the first half, with 39% expecting to reduce cash levels.

Prime funds. The survey also showed fewer than half (47%) of the companies are invested in or plan to invest in prime money market funds in 2021. That’s down from 64% in 2019, ICD said. Many companies moved out of prime funds and into government funds before and during the pandemic.

  • But as the first chart below shows, nearly all respondents (86%) plan to maintain or increase their overall money market fund investments this year.

Growing interest in ESG. The second chart shows that 41% of respondents expressed interest in ESG products. That’s up from 32% in 2020, according to ICD. In Europe, about half (49%) of the treasury professionals ICD surveyed plan to invest in ESG or socially responsible investing products.

Justin Jones

Author Justin Jones

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