Leading the Evolution in Cash Management Solutions

Cash Management

The wealth management industry has seen phenomenal changes over the past decade. Declining profitability, increased competition and changing demographics are but several factors driving the need to reinvent business models. Yet, cash management remains one frontier where assets in traditional fixed deposits and savings deposits continue growing even as savings and fixed deposit rates decline. The growing question investors face is how to better enhance their liquidity with rates falling to (and staying at) near-zero levels?


Source: Monetary Authority of Singapore, Jan 2021. Interest rates refer to average rates compiled from that quoted by 10 leading banks and finance companies. Deposits based on other residents in Singapore (excl. banks and institutions)


Cash Enhancement

In 2018, Lion Global Investors built up the LGI Cash Management suite; comprising a trio of funds designed to optimise liquidity in a low rate environment – namely our Money Market Fund (~1%* yield), Enhanced Liquidity Fund (~1.6%* yield) and Short Duration Bond Fund (~2%* yield).

At the time, one segment of the market led the evolution of Cash Management solutions in the SGD space – we call them digital leaders. These digital leaders have leveraged on the digital-first approach to market financial products and have seen significant growth in recent years. LGI has worked hand-in-hand with partners such as iFAST Financial, among the digital leaders in enhancing liquidity with the LGI Cash Management suite.

*Weighted Yield-to-Maturity Yields are stated as of end February 2021. Past Performance is not necessarily indicative of future performance.

Leading the Cash Evolution

The underlying success factor these leaders have in common is digitalization. While digital transformation is nothing new, investors have grown increasingly digitally-savvy and self-directed. Undeniably, the pandemic turbocharged the pace of a structural trend that was already accelerating.

From an investment perspective, holding excess idle cash, especially in low interest rate environments, has historically resulted in poor long-term results. The real-life implication of this is the erosion of spending power of an average consumer especially after adjusting for inflation. Investors and consumers alike have started to realise the need to better preserve and grow their cash.
Source: Lion Global Investors, Feb 2021

As at February 2021, the total assets of our Cash Management solutions have crossed S$1.5 billion.

LGI continues to develop the components that power Cash Management providers. As the landscape continues to evolve, LGI looks to innovate beyond SGD liquidity and shorten settlement times to support leaders in the evolution of enhancing liquidity.

 



Download Report


Disclaimer

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. It is for information only, and is not a recommendation, offer or solicitation for the purchase or sale of any capital markets products or investments and does not have regard to your specific investment objectives, financial situation, tax position or needs. Applications for units in our funds must be made on forms accompanying the prospectus. You should read the prospectus and Product Highlights Sheet which is available and may be obtained from Lion Global Investors Limited (“LGI”) or any of its distributors, consider if a fund is suitable for you and seek such advice from a financial adviser if necessary, before deciding whether to invest in the fund. Investments in our funds are not obligations of, deposits in, guaranteed or insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. The performance of a fund is not guaranteed and the value of units in a fund and the income accruing to the units, if any, may rise or fall. Past performance, as well as any predictions, projections, or forecasts are not necessarily indicative of the future or likely performance of a fund. Dividend distributions, which may be either out of income and/or capital, are not guaranteed and subject to LGI’s discretion. Any such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value of the fund. Any information (which includes opinions, estimates, graphs, charts, formulae or devices) is subject to change or correction at any time without notice and is not to be relied on as advice. You are advised to conduct your own independent assessment and investigation of the relevance, accuracy, adequacy and reliability of any information contained herein and no warranty is given and no liability is accepted for any loss arising directly or indirectly as a result of you acting on such information. The fund may, where permitted by the prospectus, invest in financial derivative instruments for hedging purposes or for the purpose of efficient portfolio management. LGI, its related companies, their directors and/or employees may hold units of a fund and be engaged in purchasing or selling units of a fund for themselves or their clients.

Lion Global Investors® Limited (UEN/ Registration No. 198601745D) is a Singapore incorporated company

Share this post

Other INSIGHTS

  The LionGlobal All Seasons Funds (Standard and Growth) were launched in 2018 to aim to help investors tide through all seasons of market volatility.

View More »

What is the difference between a Unit Trust and an ETF? Both Unit Trusts (also known as Mutual Funds in the United States) and ETFs

View More »

This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. By accessing or downloading any of the information or publications provided within LGI Direct, you are deemed to have consented to the Terms of Use (see below) and the conditions and disclaimers on the basis of which, they are here provided.

Comparing the TER cost for 20 years

Here’s the difference a low cost advantage makes to cost savings

Here's how much you pay

$190,272.13
Selected TER 1.00% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $90,359.56 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 2 years and 6 months.

Here's how much you pay

$271,950.61
Selected TER 1.50% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $172,038.04 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 4 years and 9 months.

Here's how much you pay

$345,744.19
Selected TER 2.00% p.a.

$99,912.57
LionGlobal All Seasons Fund 0.5% p.a.

By investing a fund with low TER

You may save $ 245,831.62 over 20 years based on an initial investment of $1,000,000 compared with a TER of 0.5% p.a.

It is enough to provide for a monthly expenditure of $3,000 over the next 6 years and 9 months.

TER (Total Expense Ratio) is the sum of various identified operating expenses charged on an ongoing basis to the fund’s assets as a percentage of the fund’s average net asset value calculated over a 12-month period at the close of the annual and semi-annual financial statements of the fund for all the p.a. tabs (1.0%, 1.5%, 2.0%).

The above scenarios are for illustration purpose only. Past performance, as well as any prediction, projection or forecast on the economy, securities market or the economic trends of the markets are not necessarily indicative of the future or likely performance of the funds. Calculations based purely on costs with no market movement or investment returns.