This article was produced by BNP Paribas Asset Management as part of their valued industry partnership with Insurance Investor.
Market volatility, a changing interest rate environment, greater counterparty awareness and evolving regulation have led to renewed scrutiny of how professional investors manage liquidity. For many, the objective remains capital preservation and immediate access to cash, but the tools to achieve it are evolving.
Against this backdrop, BNP Paribas Asset Management believe money market funds investing almost all of their holdings in government assets – known as Public Debt Constant Net Asset Value (PDCNAV or CNAV) funds – have reasserted their relevance.
For insurers in particular, liquidity assets must support both balance-sheet resilience and regulatory expectations. Public debt CNAV money market funds provide a conservative liquidity sleeve aligned with strong governance, high credit quality and predictable liquidity.
By focusing on government and public-sector issuers, we believe CNAV funds can help insurers manage short-term liquidity, while maintaining a clear risk profile. They are particularly suited to cash allocations where capital protection and certainty take precedence over yield optimisation.
Listen to BNPP AM’s experts discuss how government money market strategies may help institutional investors support capital preservation, optimise their liquidity requirements, and enhance their ability to navigate different market environments.
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