Cash Funds March 2016


[private role=’subscriber’]Cash funds performance

Of the funds surveyed by YieldReport, the best performer for March was IOOF’s Cash Management Trust with a return of 0.20%, once again just pipping the UBS Cash Trust which returned 0.19% for the month. IOOF’s CMT also had the best performance in all of the time periods ranging from 3 months to five years. The UBS cash fund was in second place across all time periods, while the BT Premium Cash Fund was third across all time periods.

The benchmark Bloomberg AusBond Bank Bill Index returned 0.19% for the month, 2.09% for 1 year and 3.14% (annualised) over 5 years. Unlike last month where none of the funds in the survey outperformed the benchmark in any of these time periods (see table below), IOOF’s fund was in line with the AusBond index for 1 month and 3 month periods and it actually exceeded the index by around 13-15 bps for 1 year, 3 year and 5 year periods.

IOOF’s CMT invests in high quality short-term money market and bank-based securities, which includes term deposits, negotiable certificates of deposit and cash notice accounts. It takes an active approach to investing by attempting to forecast short-term paths of interest rates over the cycle.

AUSTRALIAN CASH FUNDS1m (%)3m (%)1y (%)3y (%)5y (%)
Adelaide Cash Management Trust0.130.371.541.882.53
BT Premium Cash0.180.512.032.333.00
CFS Cash Management Trust0.130.331.301.692.34
CFS Premier Cash Management Trust0.160.441.782.112.80
IOOF Cash Management Trust0.200.582.382.733.38
Perpetual Cash Management0.120.351.311.592.24
Sandhurst Cash Common Fund0.140.391.611.862.48
UBS Cash0.190.542.092.483.14

[private role=’subscriber’]Enhanced cash funds performance

In the enhanced cash category, the best performing fund for March was the Mutual Enhanced Cash Fund with a return of 0.78% for the month, which is 59bps more than the benchmark AusBond Bank Bill Index. The next best performer, the Smarter Money Active Cash Fund, was 20bps lower at 0.58% for the month. Mutual’s cash fund has been in existence since April 2013 and so rankings are available only for 3 month and one year periods, where it was ranked 5th out of 20 and 10th out of 20 respectively.

Mutual’s approach is to actively manage a portfolio of debt instruments offered by the major Australian banks and other approved deposit taking institutions, with small cash and negotiable certificates of deposits positions to provide liquidity. This approach leaves it with a duration of just over 2 years. Mutual typically invests in assets which reset their base interest rate frequently, usually quarterly.

AUSTRALIAN ENHANCED CASH FUNDS1m (%)3m (%)1y (%)3y (%)5y (%)
AMP Capital Managed Treasury0.220.592.232.643.38
Antares All Maturities Ind Enh-
Australian Ethical Cash Trust0.130.281.362.513.35
BT WE BT Enhanced Cash0.030.351.512.303.37
BT Wholesale Enhanced Cash0.080.492.072.863.96
Dimensional Short Term Fixed Interest0.210.592.192.563.34
Fiducian Capital Safe0.190.391.982.493.25
IOOF MultiMix Cash Enhanced Trust0.310.512.493.044.01
Legg Mason Western Asset Cash Plus A0.250.442.412.953.89
MLC Wholesale Horizon 1 Bond Portfolio0.470.651.762.653.52
Henderson Cash Enhanced Fund0.360.482.623.154.19
Perpetual High Grade Treasury0.280.502.373.764.59
Sandhurst Strategic Income A0.200.402.033.13
Smarter Money Active Cash Fund0.650.301.793.26
UBS Cash Plus0.250.572.402.933.62
UCA Enhanced Cash Portfolio0.250.753.193.824.57
Vanguard Cash Reserve0.190.552.122.443.07
Vanguard Cash Plus0.170.591.962.563.24
Bloomberg AusBond Bank Bill0.200.582.242.573.23
*End of March 2016. Return in AUD after fees.
Underlined funds can be applied for and redeemed via the ASX mFund platform