How are the projected return ranges calculated for Cash Smart Core, Enhanced and Ultra? Why are the projected returns a range?

We use a projected return range rather than a fixed yield to provide maximum transparency to our clients about the varying nature of the actual realised yield as the returns and yields are not guaranteed. 

The calculation for the gross projected yield is based on the annualised amortised yield estimate for the portfolio’s holdings. 

  • It takes into account the individual yield to maturity of the securities, the weighted average maturity, and an amortised schedule of NAV calculation - this is calculated using the hold to maturity value of the overall portfolio. 
  • We then take out the total expense ratio (TER) net of any trailer fee rebates paid back to your account. The TER is calculated to include all costs related to the fund including the annual fund management fee (AMF). 
  • We also account for the Endowus Access Fee of 0.05%. 

This gets us to the net adjusted annualised amortised yield. 

In calculating the range, during a period of falling interest rates, we calculate the high end of the range using the projected net adjusted yield, and the low end of the range which incorporates the potential future decline in interest rates. When interest rates are seemingly stable, we would use the projected net adjusted yield as the midpoint of the range.  

The range is a more accurate reflection of the actual potential realisable yield by the investor, as the underlying securities holdings will fluctuate.