Inflation back on the Agenda — Endowus cash management solutions (September 2024)
Endowus Insights
Join our in-person China & HK Market Outlook event with Abrdn, Allianz Global Investors, and JPMAM. RSVP here

Inflation back on the Agenda — Endowus cash management solutions (September 2024)

Updated
4 Oct
2024
published
13 Sep
2024

The Federal Reserve is near-certain to trim interest rates during the next meeting on 18 September. Attention has most recently been paid to labour markets and how the higher borrowing rates have seeped into businesses.

US inflation was another key input to eventually determine whether the rate cut would be a quarter point or a half point. The latest print offered mixed news. 

Consumer prices rose in August at the slowest pace in three years on an annual basis, rising at 2.5% from a year earlier. This level also marks a deceleration compared to July’s 2.9% annual gain in prices and the lowest annual rate since early 2021. Moreover, excluding more volatile items like food, inflation remains on the uptrend. The headline number is moderating, but the gauge has remained above the Fed’s 2% target on an annual basis. 

The yield curve is disinverting, meaning that yields on shorter-duration (2-year) US Treasury bonds is yield less than the longer (10-year) ones. The normalising yield curve hints at more normal capital market pricing. Inversion occurs when the usual upward slope of the yield curve is flipped upside down. This often leads traders to become concerned about the health of the economy.

Meanwhile, want to make your idle cash work hard for you while the interest rates remain above the 5% level? Here may be your next best moves.

Cash management solutions on the Endowus platform

Here are the key money market, liquidity, and fixed income funds available on the Endowus platform for Hong Kong investors to consider:

For HKD:

For USD:

於2024年到期的通脹掛鈎債券 (發行編號 03GB2406R; 股份代號 4246)
付息日 利息釐定日 年息率 每1萬港元債券利息
2021年12月23日 2021年12月9日 2.00% 100.27港元
2022年6月23日 2022年6月9日 2.00% 99.73港元
2022年12月23日 2022年12月9日 2.17% 108.80港元
2023年6月23日 2023年6月8日 2.00% 99.73港元
2023年12月27日 2023年12月11日 2.03% 104.00港元
2024年6月24日* 2024年6月7日 2.00% 98.63港元*
於2023年到期的通脹掛鈎債券 (發行編號 03GB2311R; 股份代號 4239)
付息日 利息釐定日 年息率 每1萬港元債券利息
2021年5月17日 2021年5月3日 2.00% 99.73港元
2021年11月16日 2021年11月2日 2.00% 100.27港元
2022年5月16日 2022年4月29日 2.00% 99.18港元
2022年11月16日 2022年11月2日 2.08% 104.85港元
2023年5月16日 2023年5月2日 2.00% 99.18港元
2023年11月16日 2023年11月2日 2.00% 100.82港元

* 債券的第六個付息日原訂為2024年6月23日,由於該日並非香港的營業日,根據債券發行通函,有關付息日更改為下一個營業日的日子,利息亦累計至新的付款日。
資料來源:香港政府債券計劃網站

Why do people invest in money market funds?

  1. Maintaining an emergency fund: Life is full of uncertainties, and having a liquidity fund can be a personal safety net to get through any unforeseen emergencies, such as a period of unemployment or an unbudgeted large expense. The general rule of an emergency liquidity reserve is about 3 to 6 months of monthly expenses. The accessibility and flexibility of money market funds make them a good option while not having to sacrifice yields.
  2. Short-term investment/life goals: Money market funds could be useful for short-term goals such as saving for a vacation or wedding. It is important to ensure the investment holds its value over a shorter time period. 
  3. Parking of assets: Money market funds are also good vehicles to park or transfer assets when you are deciding on how to deploy your funds for the longer term. We do not recommend money market funds as the investment vehicle for your long-term wealth goals. Although their stability might be appealing in the short run, over the long-term their returns would be much lower than stocks and bonds.

The smart and flexible way to earn more on your cash

Looking to supercharge your cash savings? The HSBC Global Money US Dollar, with a net yield of 5.17% p.a.*#, could be a great addition depending on your needs and objectives. You can add it to your portfolio by following these steps

If you’re interested in model portfolios, CashUp - Simple is another good option, with a current net yield of 5.2 - 5.4% p.a.*#, CashUp - Plus is available as well for investors who are willing to take more risk relative to the CashUp - Simple solution. Critically, Endowus offers our cash management solutions at fees of just 0.10% p.a., making our offerings highly competitive for your low-risk investments. This is on top of our longstanding practice to rebate any trailer fees back to our clients. Learn more about our Endowus CashUp Portfolios here.

Make your cash work smarter for you. If you have money set aside for an upcoming expense, earn higher returns on it instead of letting it sit idle in your current or savings account. To get started with Endowus, click here

*As of 31 August 2024. Net yield after deducting fund-level fees and Endowus access fee, and adding back rebates. Source: Endowus Research and HSBC Asset Management.

# Yields are not equal to the actual return. Not guaranteed returns. Past performance does not indicate future performance.

Read more:

<divider><divider>

Risk Warnings

Investment involves risk. Past performance is not an indicator nor a guarantee of future performance or returns. Projected performance or returns is not guaranteed to materialise. The value of investments and the income from them can go down as well as up, and you may not get the full amount you invested. 

Rates of exchange may cause the value of investments to go up or down. Individual stock performance does not represent the return of a fund.

General risk warnings relating to collective investment schemes 

Before making an investment decision, you are reminded to refer to the relevant prospectus/ offering document for specific risk considerations and related fees and charges.

Funds are not a bank deposit and not capital guaranteed, and is subject to investment risks, including the possible loss of the principal amount invested.  

Some of the funds also involve derivatives. Do not invest in them unless you fully understand and are willing to assume the risks associated with them.

Opinions

Any forward-looking statements, prediction, projection or forecast on the economy, stock market, bond market or economic trends of the markets contained in this material are subject to market influences and contingent upon matters outside the control of Endowus HK Limited (“Endowus”) and therefore may not be realised in the future. Further, any opinion or estimate is made on a general basis and subject to change without notice. In presenting the information above, none of Endowus HK Limited, its affiliates, directors, employees, representatives or agents have given any consideration to, nor have made any investigation of the objective, financial situation or particular need of any user, reader, any specific person or group of persons. Therefore, no representation is made as to the completeness and adequacy of the information to make an informed decision. You should carefully consider (i) whether any investment views and products/ services are appropriate in view of your investment experience, objectives, financial resources and relevant circumstances. You may also wish to seek financial advice through a financial advisor or the Endowus platform and independent legal, accounting, regulatory or tax advice, as appropriate.

No invitation or solicitation

Nothing contained [in this article] should be construed as a solicitation, an offer to buy or sale, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction in any jurisdiction in which such solicitation, offer to buy or sale would be unlawful under the securities laws in such jurisdiction. No information included [on this website/ in this article] is to be construed as investment advice or as a recommendation or a representation about the suitability or appropriateness of any advisory product or service; or an offer to buy or sell, or the solicitation of an offer to buy or sell, any security, financial product, or instrument; or to participate in any particular trading strategy. Investors should seek independent financial and tax advice before making any investment decision.

Product Risk Rating: Please note that any product risk rating (the “PRR”) provided by us is an internal rating assigned based on our product risk assessment model, and is for your reference only. The PRR is subject to change from time to time. The PRR does not take into account your individual circumstances, objectives or needs and should not be regarded as advice or recommendation to purchase, hold or sell any fund or make any other investment decisions. Accordingly, you should not solely rely on the PRR in making your investment decision in the relevant Fund.

Complex Products

Some of the funds contained in this article are complex products and investors should exercise caution when investing in these products. Though these products have been authorised by the SFC, authorization does not imply official recommendation. SFC authorization is not a recommendation or endorsement of a product nor does it guarantee the commercial merits of a product or its performance.

This advertisement has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.

Disclaimers
+
More on this Tag
All you need to know about personal finance and investing
Please wait while we are submitting your email...
Thank you! Your submission has been received!
invalid email address

Table of Content