The Ashburton Money Market Fund is a highly liquid, low volatility solution without any corporate credit risk.
* Same day liquidity if instructions received prior to 11:00 (terms and conditions apply)
The objective of the Ashburton Money Market Fund is to provide interest income and preserve capital while offering high levels of liquidity to investors. The fund targets a return better than bank deposits, and performance is benchmarked against the return on the three Month Short Term Fixed Interest (STeFI 3m) Index. Investors are also provided with almost immediate* access to their investment, should this be required. The Ashburton Money Market Fund is AA.za rated by GCR and is CISCA Board Notice 90 and Regulation 28 compliant.
The Board Notice 90 regulatory framework (BN90) of the CISCA Act permits the portfolio manager to invest in a broad spectrum of money market instruments to meet the fund’s return and risk objectives. Under these regulatory guidelines, the portfolio management team has undertaken the decision to invest strictly in short-term interest-bearing instruments issued by the South African Reserve Bank (SARB) and, local banks while utilising highly-rated foreign banking institutions, authorised to conduct business in South Africa, to manage cash that is placed with them on an overnight basis. (See Figure 1).
A combination of comprehensive money market instruments such as bank-issued negotiable certificates of deposit (NCDs), floating rate notes (FRNs), treasury bills and call accounts (effectively used to manage immediate liquidity requirements) are used. The fund invests strictly in the “Big Five” local banks (FirstRand, Standard Bank, Nedbank, ABSA, and Investec), the SARB, and highly-rated international banks with local jurisdiction. As a result, a high level of liquidity is offered with a low level of risk (See Figure 2).
The Ashburton Money Market Fund is conservative by design. The primary risks are reinvestment risk (should interest rates fall in the future, the fund’s yield will decrease), inflation risk, counterparty risk and liquidity risk. Liquidity risk management is integral in the money market portfolio given the nature of the daily flows into and out of the portfolio. As prudent practice, the Ashburton Money Market Fund maintains a high level of liquidity; typically, 5% - 7% of assets in liquid form. In circumstances when more liquidity is required, the portfolio managers will determine which are the most optimal instruments to sell in order to meet the required liquidity.
The investment approach by the portfolio management team positions the Ashburton Money Market Fund as a viable alternative for corporates and institutions seeking a highly liquid, low volatility solution for short-term investment.
Source: Ashburton Investments
** Inguza Investment is guaranteed FirstRand Bank
Figure 1 represents 100% of the current fund holdings
Source: Ashburton Investments
Figure 2 represents 100% of the instrument holdings
To find out more about how the Ashburton Money Market Fund can assist you with your corporate money market requirements, please speak to your Ashburton Investments business development manager.