Endowus announced today that it is launching its Cash Smart suite of cash management products, with two options for investors: Core (projected yields between 1.1% to 1.3%) and Enhanced (projected yields between 1.9% to 2.2%).
Editor Update (21/8/20): Cash Smart rates are dynamic and are displayed on a projected basis. You can view the latest rates here.
Why Endowus Cash Smart?
Endowus Cash Smart helps you access the best cash, money market, and short duration bond funds in the industry, at the lowest cost achievable.
The features of Cash Smart would be similar to most cash management platforms out there - there isn't a lock up period, so you can withdraw and transfer your money at any time and interest is accrued daily and automatically reinvested at the fund level and reflected in the investment value shown in your account.
Endowus is rebating 100% of sales and trailer fees for both options, and there are no transaction fees for switching, buying or selling into these funds.
The only fees charged are 0.05% per year in access fees, and between 0.18% to 0.30% in fund management fees charged by the fund manager. The yields that you see are net of all these fees.
Endowus is a digital financial advisor, so they act as your fiduciary and partner with fund managers around the world to find the best portfolio for your own goals and risk appetite.
In the case of cash smart, they are partnering with UOB Asset Management, Fullerton Fund Management (a subsidiary of Temasek) and Lion Global who will be the ones managing the portfolio.
What goes into these cash management funds?
Your money goes into relatively safe funds that contains investments into high quality short-term bonds and government bills (e.g. 3-month treasury bills), institutional and bank fixed deposits, bonds to statutory boards and government-linked entities, among other things.
Because of their short tenure (denoted in months, rather than years) and low default risk, there are minimal price fluctuations of the fund while the investor receives interest on the bond.
However, investment in cash smart is not 100% risk-free. Although the risk is relatively low, there are still risks associated with these funds - there might be price volatility, the yields could change at any time (and even go lower than projected), and there might be still risks of default by any one of the borrowers.
To get started on Endowus, there is a minimum balance of $10,000 required, with a minimum of $100 per transaction. However, there is no minimum balance that must be maintained in Cash Smart.
Sign up for an account with Endowus using this link and invest at least $1,000, and you will get $20 in Access Fee credit (equivalent to $10,000 advised free, assuming Access fee of 0.40%).
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