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Frequently Asked Questions
Why are there 3 cash management groups?
Oppenheimer has always felt that it is best to be near our clients. The Firm makes every effort to match time zones in order to facilitate effective communication and faster response times, which are imperative in liquidity management. It also offers greater flexibly in scheduling meetings as well as backup in case of an office being closed due to a significant event.
What have your returns been for the last year?
Each portfolio and investment policy is unique to every client therefore any composite of returns would not be a useful metric.
Tell me more about the No Fee approach to cash management. If there is no fee, how do you make your money?
We do earn money in cash management. Here are a few reasons why we don't charge an asset management fee.
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FASB 115 has caused many corporations to designate and account for purchases of fixed income securities as "hold to maturity." Paying management fees on a portfolio that is not actively traded simply erodes portfolio returns.
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All Auction Rate Securities have commissions built into their prices, which are fixed and disclosed by the prospectus and paid to each of the participating broker/dealers. In addition, many other fixed income instruments such as municipal and corporate securities that are purchased at original issuance have selling concessions built into their prices. As a result, when hiring a fee-based manager, investors often pay both commissions and management fees.
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Fee-based mangers typically buy certain types of securities from institutions. The cost of these securities generally contains institutional commissions, which are often added by the seller of the security.
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The marketplace does not typically encourage trading in short term corporate cash instruments for potential profit since the spreads are generally very small. In fact, for most accounts profitable trading of short-term securities is somewhat elusive.
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Even if trading were encouraged, it would be counter-productive for a fully taxable company to sell a tax-free security and recognize a taxable gain merely because declining interest rates have caused the price of the instrument to increase. This would in effect be converting a tax-free stream of income into a taxable gain. Additionally, the proceeds from such a sale would have to be reinvested at a lower yield due to the decline of interest rates.
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Do you only sell your own inventory to the accounts?
We source our securities for purchase from a wide variety of markets. We've developed an intimate knowledge of the universe of securities most commonly represented in corporate liquidity portfolios.
When will I get my reporting?
Online access is next day; our accrual reporting comes within a short time of your month end.
Where are your offering pages on Bloomberg?
We have found that many of our clients do not have Bloomberg, or if they do, it is not in the office near them. Because of this, we do not use Bloomberg at this time for short-term offerings.
Click here to learn more.
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