Counting Cash: Many Companies Will Maintain or Up Cash Levels in H1

# Cash and Working Capital

# ESG

An ICD survey also shows steady and growing use of money market funds and higher interest in ESG products.

Cash on corporate balance sheets reached a record in 2020, topping $2 trillion, as companies responded to economic uncertainty created by the pandemic. New data from money market fund portal ICD suggests that a majority of corporates do not plan to cut cash levels in the first half of 2021.

61% of the 150 treasury clients surveyed by ICD plan to maintain or increase their cash balances in the first half, with 39% expecting to reduce cash levels.

Prime funds. The survey also showed fewer than half (47%) of the companies are invested in or plan to invest in prime money market funds in 2021. That’s down from 64% in 2019, ICD said. Many companies moved out of prime funds and into government funds before and during the pandemic.

But as the first chart below shows, nearly all respondents (86%) plan to maintain or increase their overall money market fund investments this year.

Growing interest in ESG. The second chart shows that 41% of respondents expressed interest in ESG products. That’s up from 32% in 2020, according to ICD. In Europe, about half (49%) of the treasury professionals ICD surveyed plan to invest in ESG or socially responsible investing products.