Cash management fund Reich & Tang has been using floating-rate instruments as hallmarks of its investment strategy.
Tom Nelson, the firm's chief investment officer said in a statement that the state of the world's economies and its influence on the desire of investors for liquidity remains the dominant issue for mutual funds focused on cash management.
Nelson further explained that they are able to manage the risk of interest rates by using these floating rate securities, emphasizing that the company is keeping 15% of its assets in the instruments.
Moreover, he said that they are able to get some extra yields and have longer maturities into the portfolio without the need to buy fixed-rate instruments.
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