Investing Ideas

Putting excess client cash to work

Exploring three fixed income options that have outperformed money market products, each with different rate and risk characteristics.

By: Brian Donnelly David Hays Jonathan Cain

Updated: 5/28/2026

Key Takeaways

Near-record levels of cash remain in money market funds despite strong equity markets and improved bond yields.
For capital not needed in the near-term, staying fully in money markets can introduce opportunity costs, whereas investing in fixed income can top the return of money markets—often with limited interest rate and default risk.
Core bonds have historically doubled the performance of money markets over the long term, and can offer income, diversification, and an equity-market hedge that cash cannot replicate.
Limited term bonds historically have offered 80% of the return of core bonds, but with half the return volatility.
Certain very short-duration bond products, such as AAA CLO ETFs, represent even more conservative options that have also meaningfully topped money markets over time.

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Putting excess client cash to work

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Investing Ideas

Putting excess client cash to work

Exploring three fixed income options that have outperformed money market products, each with different rate and risk characteristics.

Investing Ideas

Limited-term bonds: Positioning for income, stability, and return

As front-end yields adjust and duration risks evolve, limited-term investment-grade bond strategies offer a practical middle ground between cash-like investments and longer-maturity fixed income.

Investing Ideas

Why CLOs stand out in today's fixed income environment

Floating-rate structures, strong historical performance, and built-in protections are pushing CLO tranches to the forefront as investors navigate inflation risks and rate uncertainty.

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