Five months after the Tax Cuts and Jobs Act of 2017 was signed into law, many corporate treasury and finance executives are uncertain about spending the windfall, according to new research by the Association for Financial Professionals.

The 2018 AFP Liquidity Survey, underwritten by State Street Global Advisors, found that 40 percent of respondents anticipate no changes in spending at their companies in the wake of corporate tax reform. About one-fourth of companies (26 percent) plan to pay down debt, and 24 percent plan to repatriate foreign cash, or have already repatriated these funds. Of those organizations planning to repatriate funds held abroad, 27 percent have already done so.

"While treasury and finance professionals welcomed corporate tax reform, they continue to be strategic and cautious and are choosing to wait for the right opportunity to spend their tax cut savings," said AFP President and Chief Executive Officer Jim Kaitz.

Organizations continue to allocate a significant share of their short-term investment balances—an average of 75 percent—to safe and liquid investment vehicles like bank deposits, money market funds and Treasury securities, with the typical organization currently maintaining 49 percent of its short-term investment portfolio in bank deposits.

"Current markets have been causing concerns for US economic growth, yet cash balances remain high, acting as a buffer against these market uncertainties," said Yeng Felipe Butler, global head of Cash at State Street Global Advisors. "We're seeing a shift in investment professionals using cash management as part of a broader corporate strategy from historically being an operational afterthought."

Fully 59 percent of respondents do not foresee a change in their organization's short-term investments, and only 11 percent project a shift in the mix. Any changes in an organization's investment mix are more likely to be observed in prime/diversified money market funds and government/treasury MMFs. Of the organizations anticipating a change in their organization's investment mix, 24 percent  indicate they expect an increase in each of these categories of MMFs. About 20 percent predict an increase in commercial paper and bank deposits.