The element collects all of the income generated from the bond portfolio 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 is used to collect all interest generated from the bond portfolio.
- Liquidity Fund –this component aims to offer a high level of security plus a competitive interest rate. Liquidity funds invest in a broad range of deposit-style investments versus one issuer only for a typical bank deposit. Our investment managers 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 auto-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 a regular cash requirement, money will be automatically transferred from the Liquidity fund. In this way, the auto-sweep facility ensures cash is always earning a competitive rate of return.