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Over the 12 months to 28 February, the Smarter Money Investments (SMI) Smarter Money Active Cash fund returned 4.1 per cent to its wholesale investors after all fund fees. The new $50 million institutional mandate was won as a direct result of this performance, according to SMI founders Christopher Joye and Darren Harvey.
"Our commitment to an active, value-based investment style and a deep, six-person investment team has delivered a highly competitive treasury solution for individuals, advisers, companies and institutions, and this is being recognised as our three-year track record builds," Mr Harvey said.
The new agreement was finalised on 17 March and represents a 25 per cent increase in FUM. It will be split equally across Smarter Money Active Cash and the new Smarter Money Higher Income Fund.
“Over 70 per cent of SMI’s FUM is wholesale today with investors increasingly seeking low-volatility, post-fee performance that provides them with an attractive real return above the rate of inflation and negligible interest rate duration risk,” Mr Harvey said.
The Smarter Money Active Cash strategy invests its capital across Australian deposits and “investment grade” floating-rate (mainly bank) notes with a target average “A” credit rating.
Smarter Money Active Cash targets returns of one to two per cent over the RBA cash rate after fees.
Since its inception in February 2012, Smarter Money Active Cash has held, on average, 55 per cent of its portfolio in Australian cash deposits with the remainder diversified across liquid Australian floating-rate notes.
“Smarter Money Active Cash was designed to deliver superior performance in both rising and falling interest rate climates, by avoiding traditional fixed-rate bond duration risks,” Mr Harvey said.
As at 28 February, the fund received a “five-star” Morningstar Rating based on its assessed three-year risk-adjusted performance within the Morningstar Peer Group – Australian Short Term Fixed Interest – Investment Trust, since February 2012.
Launched in September last year, SMI’s new Smarter Money Higher Income Fund aspires to a higher net return hurdle of up to three per cent above the RBA cash rate after fees.
Since its inception the fund has delivered an annualised return of more than five per cent after all fund fees.