How is the projected return range calculated for the Cash Smart Core and Enhanced portfolios? Why are the projected returns rates 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 realized yield as the returns and yields are not guaranteed. 

The calculation for the gross projected yield is based on the annualized amortized 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 amortized 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 annualized amortized 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 realizable yield by the investor, as the underlying securities holdings will fluctuate. 

Endowus Cash Smart Core has two components - the Fullerton Cash Fund, which only has institutional fixed deposits that do not fluctuate in value, combined with the Lion Global Enhanced Liquidity Fund, which amortizes the lifetime value of its positions which are all hold-to-maturity securities and therefore also sees little fluctuation in returns or yield. 

Endowus Cash Smart Enhanced has two components - the Lion Global Enhanced Liquidity Fund, which amortizes the lifetime value of its positions, which are all hold-to-maturity securities and therefore has little fluctuation in returns or yield, combined with the UOB Asset Management United SGD Fund, which is a short duration fixed income product that has mark-to-market impact but has a long term steady return profile.

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