Cash Drag
Un-invested capital, or capital invested in cash-equivalent securities, is sometimes referred to as “cash drag.” Since this capital has no market exposure, it may drag down portfolio returns over time because it has no upside potential.
Un-invested capital, or capital invested in cash-equivalent securities, is sometimes referred to as “cash drag.” Since this capital has no market exposure, it may drag down portfolio returns over time because it has no upside potential.