December 2020 – Monthly Commentary

The Halyard Asset Management Reserve Cash Management (RCM) strategy generated 1.23% after fees and expenses for the year.  That compares favorably to the 0.32% total return of the iMoneyNet Money Fund average.  As of January 1, 2021, the RCM strategy has a duration of less than 5 months and a weighted average yield to maturity of approximately 0.37%.  In comparison, the benchmark has a yield-to-maturity of 0.00% due to the high management fees associated with those funds and the current low interest rate environment.  Aside from Treasury Bills, the top 5 RCM holdings are Toyota Motor Credit, Allstate Corporation, Lowe’s, Ralph Lauren, and Oracle.  The composite is overweight floating-rate notes, a structure that typically performs well when interest rates rise.  While we don’t anticipate an interest rate hike anytime soon, floaters are attractive relative to fixed rate paper.