At FLCLASS, we are committed to providing services that fit the varying needs of Florida governmental entities through many different market conditions and investment cycles. As a result of the economic downturn in response to the COVID-19 pandemic in 2020, the FLCLASS Board of Trustees recognized the need for a medium-duration portfolio designed to generate a higher yield by investing further out the yield curve. With the assistance of investment advisor and administrator Public Trust Advisors, we are pleased to introduce the FLCLASS Enhanced Cash product designed to complement our existing liquidity portfolio.

What is FLCLASS Enhanced Cash?

FLCLASS Enhanced Cash has a weekly redemption structure and a variable NAV of approximately $10.00 per share. FLCLASS Enhanced Cash is designed for investors with slightly longer investment horizons and the ability to tolerate a higher risk profile. Below are a few key features about the Enhanced Cash portfolio:

Enhanced Cash is a variable NAV fund

A stable NAV portfolio generally requires a weighted average maturity (WAM) of 60 days or less and a weighted average life (WAL) of 120 days or less. Because Enhanced Cash incorporates medium-duration securities that seek to generate a higher rate of return, it is recognized as a variable NAV portfolio. With Enhanced Cash, the FLCLASS investment team adheres to the same top-tier credit metrics utilized in the FLCLASS liquid portfolio yet does not claim to be a stable or constant NAV portfolio; FLCLASS provides Florida governmental entities a transparent view into the inner workings of their portfolios. In short, Enhanced Cash is a variable NAV portfolio that seeks to generate a higher yield by investing farther out the yield curve.

Enhanced Cash transactions settle one business day after the transaction date selected in the FLCLASS online portal 

If you enter an Enhanced Cash redemption request on a Tuesday before 3:00 p.m. ET cut-off time, the funds will be available the following business day.

Eligible investments for Enhanced Cash are the same as the FLCLASS liquid fund but maturities differ

While both FLCLASS portfolios only invest in securities that are permissible under the Florida State Statutes for local governments, the extended maturity range of Enhanced Cash securities distinguishes it from the FLCLASS liquid fund. Both Investment Policies utilize the same asset classes while Enhanced Cash permits medium-duration securities.

How Can I Use Enhanced Cash?

Enhanced Cash is best suited for your local government’s non-operating reserve funds. It might be helpful to review past years’ investment balances to better evaluate which funds may be considered for medium-duration investing; whatever represents the “low watermark,” or the funds that have never been withdrawn or redeemed, is what could be invested in Enhanced Cash. While the FLCLASS liquid fund likely forms the foundation for your immediate liquidity needs, Enhanced Cash strives to optimize funds that do not need to currently be withdrawn or redeemed.

Should you be interested in learning more about FLCLASS Enhanced Cash, please contact the FLCLASS Relationship Team. If you’re ready to get started with Enhanced Cash today, please fill out the form below!

Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. All comments and discussions presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information presented should not be used in making any investment decisions. This material is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. FLCLASS is not a bank. An investment in FLCLASS is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the FLCLASS prime-style fund seeks to preserve the value of your investment at $1.00 per share, they cannot guarantee they will do so. For risks associated with investing in prime-style, government-style, and enhanced cash-style local government investment pools, please click here. Past performance is no guarantee of future results. Any financial and/or investment decision may incur losses.