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Why is the Cash Needs Tool Beneficial?

What are the Key Features & Preferences of the Cash Needs Tool?

Use Excess Cash for Distributions

Journal Cash Between Sleeves

Include Contribution Cash

How do the Features of the Cash Needs Tool Work Together?

Initial Portfolio State

Step 1: Use Contribution Cash

Step 2: Use Excess Cash for Distribution

Step 3: Journal Cash Between Sleeves

Step 4: Final Sleeve Cash Summary

Step 5: Run Cash Needs Rebalance

Summary

Constraints & Rules

Best Practices

Why is the Cash Needs Tool Beneficial?

The enhanced Cash Needs Tool lets you manage distributions, contributions, and internal sleeve cash balances in a single workflow. It allows you to:

• Prioritize the use of excess cash to fund distribution needs before selling
  
  
• Re-balance cash between sleeves by journaling excess cash from overweight sleeves into underweight sleeves.
  
  
• Optionally include cash from the contribution sleeve

What are the Key Features & Preferences of the Cash Needs Tool?

The Cash Needs Tool has been enhanced! Use it to manage distributions, contributions, and internal sleeve cash balances in a single unified workflow:

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Use Excess Cash for Distributions

Use the excess cash to fund distribution needs which is already available in the portfolio before raising additional cash.

• Default: Enabled

• When enabled: Excess cash from each sleeve is used to fund the distribution sleeve before raising cash through trades

• When disabled: All distribution cash is raised directly from sleeves using the selected distribution method.

Functionality:

• Overweight sleeves are prioritized first

• Sorting is done by:
  • Most overweight
  • Highest excess cash
  • Most out-of-balance %

• Cash is journaled only from sleeves above their cash target, and journals net to $0

Example:

If Sleeve 1 has $4,000 of excess cash and Sleeve 3 has $2,000 in excess cash and the distribution sleeve needs $5,000:

• $4,000 will be journaled from Sleeve 1

• $1,000 will be journaled from Sleeve 3

• If required additionally, the remaining amount is raised using the default distribution method

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Journal Cash Between Sleeves

Use the excess cash to evenly distribute from overweight sleeves to the underweight sleeves, this helps to avoid unnecessary buying or selling.

• Default: Enabled

• When Enabled: 

• • Cash is moved between normal sleeves without including distribution or contribution
• 
  
  • Excess cash is journaled out of the overweight sleeves and moved to the underweight sleeves.

Functionality:

• Overweight Sleeves: Sorted by highest Out of Balance % → most excess cash

• Underweight Sleeves: Sorted by most underweight → least excess cash

• Journals stop when either:

• • Excess cash is unavailable from the overweight sleeves
•  
  • All sleeves are within target

Example:

• Sleeve 1 (Overweight, $1,500 excess)

• Sleeve 3 (Underweight, $1,000 short of target) → $1,000 is journaled from Sleeve 1 to Sleeve 3, and the balance $500 remains in Sleeve 1 if no other sleeves are underweight

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Include Contribution Cash

Use the available contribution sleeve cash to meet distribution needs and reallocate it to the normal sleeves—without needing to run the spend cash tool separately

• Default: Enabled

• When Enabled: 

• • Cash from the contribution sleeve is first used to fund the distribution sleeve if the distribution sleeve has a cash need. Please Note: Only free contribution cash is included. If the contribution sleeve has a protected set aside target, that will remain in the contribution sleeve
•  
  • Any leftover cash is allocated to the normal sleeves based on the sleeve contribution method, for example sleeve target
•  
  • Spend cash logic runs at the end as part of the cash needs rebalance logic

Functionality:

• Contribution → Distribution → Normal Sleeves

• Only excess above the contribution sleeve's set-aside target is used

• Reallocation does not trigger trades until the final rebalance phase

Example:

• Contribution sleeve has $10,000 cash

• Distribution sleeve needs $3,000 → $3,000 journaled first

• Remaining $7,000 allocated:

• • $2,100 to S1
• 
  
  • $2,100 to S2
•  
  • $2,800 to S3

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How do the Features of the Cash Needs Tool Work Together?

Example: Full Cash Needs Optimization

All Options Enabled:

• Use Excess Cash for Distribution = ✓

• Journal Cash Between Sleeves = ✓

• Include Contribution Cash = ✓

• Distribution Method = Sleeve Target 

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Initial Portfolio State

Step 1: Use Contribution Cash

Fund the Distribution Sleeve

$3,000 journaled from Contribution → Distribution

Remaining in Contribution: $1,000 excess

Prorate remaining $1,000 to normal sleeves based on target %

Each sleeve = 25% target

$1,000 ÷ 4 sleeves = $250 each

Journal Movements

Contribution → Distribution: $3,000

Contribution → S1: $250

Contribution → S2: $250

Contribution → S3: $250

Contribution → S4: $250

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Step 2: Use Excess Cash for Distribution

• Distribution sleeve already fully funded from Contribution. No additional journals required.

Step 3: Journal Cash Between Sleeves

Post-contribution, updated sleeve cash values:

S2 & S4 are now both underweight by $250

Journal Decision:

• S1 → S2: $250

• S1 → S4: $250

• Journals stop once underweight sleeves are at/above target

Step 4: Final Sleeve Cash Summary

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Step 5: Run Cash Needs Rebalance

Summary

• ✓ Distribution sleeve fully funded using Contribution sleeve

• ✓ Remaining contribution cash allocated proportionally across all sleeves

• ✓ Excess sleeve cash moved from overweight sleeves into underweight sleeves

• ✓ All excess spent through cash needs rebalance

• ✓ All journals net to zero

Constraints & Rules

• Journals never take a sleeve below the target cash

• Journals will not take an overweight sleeve and make it underweight. It can only journal down to the cash target or the sleeve target, whichever comes first

• Negative cash sleeves are prioritized first

• Distribution methods like Most OOB are respected if the excess cash is insufficient

Best Practices

• Run cash needs with all three options enabled for fully automated allocation

• Disable individual options as needed, depending on investment objective

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