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Expert insights on the short end of the curve

Short Term Investments Committee

10 November 2023 |
Active ESGLiquidityMacro
Federated Hermes’ Short Term Investments Committee of portfolio managers meets on a monthly basis to provide insights, strategise, and discuss investment opportunities across the short end of the yield curve.

The top takeaways from October meeting:

  • Geopolitical uncertainty generally leads to a flight to quality; however, we have seen only a small amount of this since the onset of the Israeli conflict. Despite the harrowing situation, short term markets continue to operate smoothly for the most part, but we remain attentive to any factors that could change that or add downward pressure.
  • Prime liquidity portfolios are seeing a lot of activity in the 3-month to 4-month part of the curve as issuers look to get funded over year end. For the longer end of the curve, a more opportunistic approach is warranted. Markets are reacting quickly to new data, like the recent retail sales release, before settling down after 24 hours. So, we are capitalising on opportunities quickly when they arise.
  • Ultrashort portfolios have found attractive securitised auto loan deals from large credit unions lately. This prime collateral came into popularity via securitisations last year, so strong credit analysis and due diligence is vital in these transactions due to the relatively short performance history.

Short Term Investments Committee:

Federated Hermes Short Term Investments Committee (STCI) is a collection of investment professionals with in-depth experience investing across the 0-3-year part of the yield curve. On a monthly basis, the committee meets to provide insights, strategise and discuss investment opportunities.

The Committee is headed by Nicholas Tripodes, CFA and Mark Weiss, CFA. Nick is senior vice president, senior portfolio manager and head of Low Duration/Structured Products Group. He is responsible for portfolio management and administration of low duration multi-sector portfolios with concentrations in investment-grade securities, as well as management and administration of structured product allocations. Mark is vice president and senior portfolio manager. He is responsible for portfolio management and research in the fixed-income area concentrating on liquidity portfolios.

For more information on Federated Hermes’ liquidity solutions please click here.

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