Endowus Cash Smart Portfolios are designed to help you earn a return on your cash by investing in Money Market Funds (MMF) and/or Short Duration Fixed Income Funds.
For more information: How do I choose between Endowus Cash Smart Secure, Enhanced and Ultra? (SG)
What yields do we show, and what do they mean?
As the portfolios hold different types of funds, we use different industry standards to calculate the yield for each component:
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Yield for money market funds:
This is the 7-Day Yield. It is calculated as the change in value (NAV plus reinvested distributions) over the trailing 7 days, annualized on a compound basis.
It's a quick, short-term measure that shows what the fund has earned recently, annualized to give you a percentage return for the year.
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Yield for short-duration fixed income funds:
This is the Yield to Maturity (YTM).
It is an estimate of the total annual return one would earn if one held all the bonds in the fund until their maturity dates.
How is the overall portfolio yield calculated?
The yield shown for your entire Cash Smart Portfolio (Secure, Enhanced, or Ultra) is a weighted average of the yields of all the underlying funds.
What is the difference between gross yield and net yield?
The difference between Gross and Net yield is essentially the impact of fees and rebates on your return.
Net yield is after deducting fund-level fees, and adding back rebates. Gross yield is before deducting any fees.
What are the risk considerations for investing in Cash Smart?
Cash Smart Portfolios, which consist of money market and/or short-duration fixed income funds (unit trusts), are designed to deliver relatively stable returns compared to other fixed income portfolios of longer durations.
Nonetheless, there is risk in investing in the Cash Smart Portfolios, and they are not capital-guaranteed. Understanding the historical maximum loss of the respective portfolio can be a good way to assess whether the portfolio is suitable for your risk appetite.
Historical maximum loss(“drawdown”) is the fall from the peak (the highest point) to the trough (the lowest point) in investment value, based on historical performance.
Investors may use the historical maximum drawdown as an indication of the maximum loss they may have experienced by investing in the specific portfolio over a period of time.
Please note that the drawdown figure is based on historical performance, which may not be indicative of future performance. There is always the risk that the latest maximum drawdown will be overtaken by a new maximum drawdown in the future. Investors should therefore view the historical maximum drawdown as a reference point and not a guarantee of future maximum loss.