The cashflow conundrum in a higher yield world

In today's financial landscape, investors are faced with the dual challenge of meeting long-term objectives while managing short-term cashflow needs.

As interest rates reach a 15-year high, the yields available on fixed income assets present new opportunities—but also new risks. The gilts crisis of 2022 underscored the importance of liquidity, highlighting the critical need for a robust cashflow policy to avoid significant financial pitfalls.

Investment Insights

Our latest Investment Insights briefing note – 'The cashflow conundrum in a higher yield world' – addresses these challenges and provides actionable strategies to help investors align their portfolios with their cashflow requirements while minimising risks like forced selling and sequencing risk. 

Key information

• The importance of cashflow policy: Learn why aligning asset income with cashflow needs is crucial for portfolio efficiency, and how the alternative — selling down assets — can lead to unwanted costs and risks.  
• Risks of forced selling and downside risk: Understand the dangers of forced asset sales and how crystallising losses can exacerbate financial challenges, particularly in a high yield environment.
• Maximising cashflow generation: Explore a variety of asset classes that can generate reliable income, from traditional corporate bonds to less liquid alternatives, and discover how to structure a portfolio that meets both short-term and long-term cashflow needs.
• Tailored strategies for different investor types: This note offers tailored guidance for all types of institutional investors on constructing a cashflow-focused investment strategy that aligns with your specific objectives and constraints.