Put your money to work with an active cash allocation
Whether you are seeking diversification for your portfolio, aiming to preserve capital or have short term investment needs, an allocation to cash is likely to complement your investment portfolio. While cash is a modest enhancer of returns, it can be a safe haven in times of market turbulence. With active management of your cash portfolio there is potential to enhance the modest return profile while providing stability. We are one of the largest managers of cash funds in Australia. With a long term and solid track record of outperformance, we invest in overnight cash deposits, bank bills, negotiable certificates of deposit, commercial paper and floating rate, corporate and asset-back securities. Our investment process incorporates the best of these investment opportunities into a diversified portfolio. The team quantifies each asset’s risk characteristics, then monitors the market to determine the range of opportunities available. The goal of the process is centered on liquidity delivery at all times, while maximizing return opportunities for variant risk profiled portfolios.
We aim to deliver the best ‘value for risk’
We believe in active management for our short term investment portfolios, specifically our active style incorporates a detailed macro understanding of factors driving money market yields. Investment decisions are made based on the opportunity set which offers the best value for risk. Our liquidity management philosophy is that relative to the benchmark, return must be commensurate with risk. Our principal role is to ensure that this value for risk equation holds true at all times. This approach allows value to be added via duration, credit and liquidity management.
ESG factored in
We monitor corporate governance risks to reduce the likelihood of defaults
Cash and shorter dated fixed income investments face unique challenges when it comes to successfully integrating environmental, social and governance (ESG) factors into the investment process. Unlike equity investments which are perpetual securities, debt investments (which mature) are exposed to duration and credit risk, as opposed to valuation risk. Corporate governance is the most important ESG issue for money market investors. Corporate collapses can seriously impact a portfolio’s performance and such events usually occur as a direct result of poor corporate governance. Therefore, corporate governance risks are strongly incorporated within our disciplined investment process and credit research, which has a strong focus on managing default risks.
Our short term investment team is one of the largest managers of cash funds in Australia. We invest in overnight cash deposits, bank bills, negotiable certificates of deposit, commercial paper and floating rate, corporate and asset-back securities. The team boasts one of the largest number of dedicated portfolio managers of cash funds in Australia, with a long term and solid track record of outperformance.
Our corporate RI strategy is based upon three strategic pillars of quality, stewardship and engagement.
In the Short Term Investments space, the Environmental, Social and Governance (ESG) assessment most often comes through its impact on the internal credit rating (ICR) provided by the Credit Analysts via our Credit Research process. Learn more about the Short Term Investments team's approach to Responsible Investment.