The cash element collects all of the income generated from the bond portfolio (if held) and then provides a cash management system to ensure income is paid to our clients in accordance with their wishes i.e. monthly, quarterly, half-yearly or annually.
The cash element is divided into two components:
- Cash account – this account receives income generated by the income element of your portfolio so it can be paid out to a bank account of your choice
- Liquidity fund(s) – this offers a means for excess cash to earn a competitive rate of interest. Liquidity funds invest in a broad range of ‘deposit-style’ investments in order to deliver an attractive interest rate, while minimising risk to capital. Our Investment Management Team will select a fund with a high credit rating and a consistent performance record.
In order to help our client’s cash element to work as hard as possible, our regular-sweep facility can automatically transfer any excess money in the cash account back into the Liquidity fund where it can earn a higher interest rate and enjoy even greater security. Conversely, if the cash account is too low to meet your regular cash requirement, money will be automatically transferred from the Liquidity fund. In this way, the regular-sweep facility ensures cash is earning a competitive rate of return – and that you always have sufficient cash at hand to meet your day-to-day requirements.