iShares Core Cash Article

Cash: Unlocking its true potential

Cash remains the foundation upon which portfolios are built; however, traditional investment options fail to deliver the expectations of return. With innovations in cash investments’, it’s time to rethink this asset class and put cash to work. 


The traditional bedrock of
portfolio construction

Cash remains the foundation upon which investment portfolios are built. It’s a defensive asset class known for its low-risk yet low-return allocation aimed squarely at minimizing risk and mitigating volatility. Importantly, cash also provides liquidity and transparency to investors during times of market uncertainty.

Yet, given historically low investment returns on typical cash products like cash management accounts and term deposits, coupled with liquidity issues attached to term deposits, cash investments remain largely uncompetitive. Many portfolios fail to realize the true potential that cash can bring.

With recent innovations in cash investment options, it’s time to rethink this asset class.

A new approach:
3 pillars to cash investing

Although investing in cash is a good way to diversify your portfolio and give you some much-needed peace of mind, cash investments now don't provide the same level of income potential they have in the past. By taking a fresh look at the role that different cash investment options can play can help you achieve your financial goals sooner. 

When it comes to looking at the options available, it’s important to think about how it will allow you to enhance your cash allocation in three important ways:

  1. How quickly you can access your cash (liquidity);
    This will enable you to quickly access your funds, not only to free up cash for your liabilities or living expenses, but to allow you to quickly reposition funds and potentially deliver better investment returns.

  2. How the product works (transparency);
    Providing you with greater understanding of underlying assets and visibility of fees, allowing you to more effectively manage investment costs.

  3. What returns you will receive for their investment (yield).
    Yield can be enhanced by moving away from traditional cash products, yet with a continued focus on incorporating liquidity and transparency in cash investments.

Putting cash to work

Sitting in between cash management accounts and term deposits is an investment solution that offers the liquidity, transparency and yield investors are looking for - and that’s the iShares Core Cash ETF.

The iShares Core Cash ETF employs a passive investment strategy that aims to provide investors with the performance of the S&P/ASX Bank Bill index (before fees and expenses), while offering them the ability to achieve capital preservation and regular income with a diversified portfolio of high quality, short-term money market instruments.

And importantly, with the iShares Core Cash ETF being 100 per cent invested in cash and cash equivalents, the fund is truly liquid, holding investments that can easily be sold on a same day basis to meet liquidity requirements. This makes the iShares Core Cash ETF the ideal foundation of an investor’s portfolio for their essential cash allocation.

Why iShares Core ETFs?

Low cost

Low cost

At less than 1/6th of the average cost of Australian managed funds1, providing broad market exposure to help build a diversified portfolio.

Quality

Quality

iShares consistently delivers quality ETFs that clients globally rely on to invest for the future.3

Simplicity

Simplicity

With just two or three iShares Core ETFs, investors can easily build a broadly diversified portfolio across major asset classes.