GLOBAL - Three enhanced sub-funds of the State Street Global Advisors (SSgA) cash management fund will allow investors to maximise income while preserving capital and generating short-term liquidity through a short duration fixed income strategy, the firm has claimed.
SSgA launched the three sub-funds, the sterling, euro and US dollar funds, to meet or exceed the respective three-month LIBOR return over a trailing one-year period. The JP Morgan Cash Index three-month was chosen as the benchmark.
The enhanced cash funds will invest in an expanded universe of securities that go beyond the money market securities typically utilised in an AAA-rated constant NAV fund.
The strategy will take a relative value approach in identifying opportunistic investments in short-to-intermediate maturities along the yield curve. Typical holdings may include money market securities, sovereign bonds, corporate bonds, asset-backed securities, repurchase agreements, total return and interest-rate swaps.
Michael Karpik, senior managing director and head of global cash, SSgA, said: “The launch of our enhanced cash management funds reflects the market demand for higher yielding funds relative to what is available from AAA-rated, daily liquidity constant NAV-type funds.”
By Angele Spiteri Paris
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