Author Archive
June 2020 – Monthly Commentary
June 2020 In the decades that the Halyard team has been managing the Reserve Cash Management (RCM) strategy we’ve explained that the goal of the RCM is to outperform the money market universe while avoiding the downside risk the universe has demonstrated on occasion. We endeavor to accomplish that through security selection, believing the mistake of so many investment advisors have made has been to focus investment in the highest ...
May 2020 – Monthly Commentary
May 2020 The Reserve Cash Management composite continued to enjoy the benefit of spread tightening in May, generating a total return net of fees of 0.36%. The characteristics of the composite changed little from the prior month and the average credit rate is A+. The Federal Reserve executed their lender of last resort function brilliantly. That is until the June 10th post-FOMC press briefing. Prior to the ...
April 2020 – Monthly Commentary
April 2020 We open this monthly commentary with a discussion of the year-to-date performance of our Reserve Cash Management composite. We manage the underlying portfolios of that composite in a highly conservative fashion and that’s reflected in the performance. Through April, the total return has been 0.45%, net of fees. That compares favorably to PIMCO’s MINT, and Blackrock’s NEAR, which are the largest short maturity fixed income ETF’s in the ...
March 2020 – Monthly Commentary
March 2020 Since we penned our last monthly update, the unthinkable has come to pass. The Coronavirus death toll, which just a month ago seemed an abstract concern, has come to cripple the daily activities of the entire world. Social distancing, face mask demand, shortages of staples such as paper goods, pasta, and flour have become part of our common consciousness. Our leaders have begun to talk of restarting the ...
February 2020 – Monthly Commentary
February 2020 We’re going to start this monthly update by focusing on the positive because there is so little of it in the media lately. The most notable news was the February employment report which astounded investors with a gain of 273,000 net new workers joining the workforce, 100,000 more than had been forecast. Moreover, the previous month was revised from 225,000 net new workers to 273,000. The unemployment rate ...
January 2020 – Monthly Commentary
January 2020 The Treasury Department is the agency assigned the responsibility for issuing government debt, among other varied responsibilities. Since the financial crisis, the Treasury has been tasked with financing the enormous debt burden of the United States. Initially, criticism of profligate deficit spending was heard from the “Tea Party” politicians, but over the course of the last few years, that criticism has ceased. In fact, acceptance of the deficit ...
November 2019 – Monthly Commentary
November 2019 As we ease into year end, the Fed has managed to avoid upsetting the capital markets as it did last December. Fed Chairman Powell, at the recent post-FOMC press conference sounded a tone of neutrality with regards to policy and despite repeated questions about the next move in the overnight lending rate, he remained noncommittal. He also faced questions about the repo market and the performance of the ...
December 2019 – Monthly Commentary
December 2019 The bullish stock market that generated such outsized returns last year continues its upward trajectory in the opening days of 2020. Undeterred by a supposed Iranian plot to kill Americans, the United States’ removal of the supposed plot mastermind, the Iranian missile attack response, including the Iranian attack of a Ukrainian passenger aircraft, the various stock indices have reached new all-time highs. The bond market, ...
October 2019 – Monthly Commentary
October 2019 Last month we wrote of the technical hiccup in the Repo market, the financing mechanism Wall Street utilizes to borrow money to pay for securities. We identified it as a symptom of too much government borrowing as the U.S. runs wider and wider deficits. To reiterate, the repo market is a little-followed, but important cog in capital markets. We also wondered what the government would do about the ...
September 2019 – Monthly Commentary
September 2019 An esoteric segment of the Fixed Income market not normally followed by the broad investment community is the Repo market (Repo is short for Repurchase Agreement). Repurchase agreements are the mechanism in which U.S. Treasury note and bond positions are borrowed or lent; the so called “grease” of bond market leverage. During the week of September 16th the Repo market temporarily broke down, wreaking havoc on short term ...
