In today’s volatile economic environment the phrase ‘cash is king’ has never been truer. The effective management of cash is absolutely essential, both to deliver returns to protect against the ravages of inflation, but also to ensure that only credit risk acceptable to the client is taken.

Typically rates on offer will reflect the underlying credit risk of the institution, but this is not always the case. Consequently it is possible to enhance returns without increasing risk by exploiting this arbitrage.

Westminster manages smaller cash mandates on an advisory basis and for significant sums uses discretionary mandates with private or investment banks. As Westminster are fully independent there are no restrictions as to with what bank or financial institution cash can be held.

Currencies managed will usually reflect an investor’s base currency, most commonly sterling, euro, dollar or Swiss franc.

Increasingly popular as an alternative for a proportion of cash are structured notes, the simplest of which guarantee the return of capital invested at maturity, plus participation in the movement of the value of an asset class or index. These often appeal to cautious investors who may not be reliant on the interest otherwise available on deposit but do not want to risk their capital, and to those who would like to benefit from the potential price movement of a particular asset class.

Participation in structured notes can be in any number of measurable assets such as equities, currencies, commodities and can have terms from weeks to years.