cash reserve and investable assets

Does cash reserve belong to investable asset?

Quote from CFA 2013 AM

Assets The Voorts own their home, valued at USD 1,250,000, mortgage-free. They have a taxable investment portfolio with a current market value of USD 2,500,000. This portfolio has no previous tax liability due in the coming year. Thomas received a lump-sum USD 10,000,000 payment from the sale of his business; his cost basis is zero. The net proceeds of the sale will be added to the Voorts’ investment portfolio. Their goals are to grow the asset base of the portfolio over time to maintain its after-tax purchasing power and to establish and maintain a cash reserve of USD 250,000.

I think it’s part of investable base because we think from total return perspective.

Someone else please chime in.

Indeed it is. It is, however, mandatorily allocated to cash equivalents in the strategic asset allocation, so portfolios that do not meet that criteria need to be rejected.

Exactly no, but might count as it belongs.

Thanks! I also came across this on schweser secret sauce:

“The desire for a liquidity reserve is recorded under the liquidity constraint and held in the asset allocation. With no plan to distribute it, the funds would remain part of the investable assets , as cash equivalents.”