Register Log-in Investor Type

Cash drag

When part of a portfolio is invested in cash or cash-equivalent securities, as opposed to securities which are the portfolio’s main focus, the cash component has no market exposure. This effect is referred to as cash drag. 

In a situation where markets are rising, cash tends to underperform markets and cash drag is negative. Conversely, where markets are falling, cash will tend to outperform the market and cash drag will be positive.

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…