Cash and fixed interest funds
These conservative-type funds invest predominantly in cash and fixed interest (also called fixed income). Fixed interest assets include term deposits, corporate bonds, government bonds, semi-government bodies and debentures.
Cash and fixed interest investments are generally defensive in nature and are lower risk than shares and property, however, offer potentially lower returns over the longer term.
| Investment Options | Risk Level | Investment Objective | Investment Strategy |
|---|---|---|---|
| Cash and Fixed Interest Funds | |||
| Vanguard Australian Fixed Interest Index Fund | 3-Low to medium | The Fund seeks to track the return of the Bloomberg AusBond Composite 0+ Yr Index before taking into account fees, expenses and tax. | The Fund invests in high-quality, income-generating securities issued by the Commonwealth Government of Australia, Australian State Government authorities and treasury corporations, investment-grade corporate issuers, as well as overseas entities that issue debt in Australia, in Australian dollars. While being low cost, the Fund also provides some protection against capital volatility. The investments in the Fund are predominantly rated BBB- or higher by Standard & Poor’s ratings agency or equivalent. |
| Vanguard International Fixed Interest Index Fund (Hedged) | 3-Low to medium | The Fund seeks to track the return of the Bloomberg Global Treasury Scaled Index hedged into Australian dollars before taking into account fees, expenses and tax. | The Fund provides low-cost exposure to high-quality, income-generating securities issued by governments from around the world. The Fund invests in fixed income securities that generally range in credit quality from BBB- to AAA as rated by Standard & Poor’s or equivalent ratings agency. The Fund is hedged to Australian dollars so the value of the Fund is relatively unaffected by currency fluctuations. |
| Macquarie Treasury Fund | 2 – Low | The fund aims to perform in line with the Bloomberg AusBond Bank Bill Index over the short term (before fees) by using a low-risk investment strategy. | The Fund is designed for investors seeking a treasury management solution that provides exposure to a portfolio of highly-rated cash and short-term fixed interest securities, primarily issued by banks, corporates and the Australian government. The permitted securities include, but are not limited to, negotiable certificates of deposit, short-dated floating rate notes and deposits. The Investment Manager’s cash management approach is driven by disciplined and thorough processes backed by in-house quantitative analysis. The Investment Manager aims to enhance returns by formulating views on the likely direction of short-term interest rates and positioning the Fund to benefit from these views. The Fund also seeks to add value through low-risk enhancements such as deposit accounts and short-dated floating rate notes. The Fund may be exposed to derivatives, including derivatives that increase in value when the underlying instrument falls in value, and decrease in value when the underlying instrument rises in value. |
| RAM Australian Credit Fund | 2 – Low | This Fund aims to provide a return (before fees, costs and taxes) that exceeds the official Reserve Bank of Australia cash rate by 3% per annum over the medium term, with high levels of capital stability. | The investment strategy is to primarily invest in secured mortgages against Australian property, asset backed securities, securitised investments and cash. The fund will invest in debt securities (ASX & OTC) issued by RAM Income Capital and units in the RAM Real Income Fund Class A1 & A2. The Investment Manager will seek to control any short-term capital volatility by investing in high quality assets and by managing a diversified portfolio of income producing assets in the underlying investment vehicles. |
| RAM US Dollar High Yield Hybrid Income Fund | 2 – Low | This fund aims to provide a gross return (before fees, costs and taxes) that exceeds the Bloomberg AusBond Bank Bill Index by 3% per annum over the long term, via investment in US Dollars securities. | The Fund is to primarily invest in senior and subordinated (Hybrid Capital Securities) income producing investments in Global Fixed Interest markets, in US dollars that are issued by Australian & Global large financial institutions. The fund will seek to control the short-term variability of capital by investing in high quality assets and by managing a diversified portfolio of income producing assets. The fund is not hedged into Australian dollars. The strategy invests in both investment grade and speculative grade securities including Government Debt, Corporate Debt, Asset Backed Debt/Funds and Debt issued by Financial Institutions. |
