CFS W Strategic Cash (FSF0075AU) Report & Performance

What is the CFS W Strategic Cash fund?

The First Sentier Strategic Cash Fund provides a regular income stream from investments in money market securities, with a low risk of capital loss. The Fund’s strategy is to invest in high quality money market securities, with predominantly short maturities, to achieve a very stable income stream.

  • The Fund invests in assets that offer value-for-risk by taking into account economic analysis and market trends.
  • Derivatives may be used for risk management.
  • The objective is to provide a regular income stream from investments in money market securities with a very low risk of capital loss. The Fund aims to outperform the returns of Australian money markets over rolling three year periods as measured by the Bloomberg AusBond Bank Bill Index before fees and taxes.

Growth of $1000 Investment Over Time

Performance Report

Peer Comparison Report

Peer Comparison Report

Latest News & Updates For CFS W Strategic Cash

CFS W Strategic Cash Fund Commentary September 30, 2023

The Fund appreciated by 1.29% in the September quarter, a return that was 21 bps ahead of the bank bill benchmark. This extended the Fund’s favourable recent performance track record; three quarters of the way through the calendar year, returns are more than 60 bps ahead of the benchmark.

Higher official interest rates have lifted prospective returns from short term investments including Term Deposits and Negotiable Certificates of Deposit. The Fund’s allocation to residential mortgage backed securities (RMBS) also assisted performance during the quarter. Trading margins in this part of the market have narrowed, in turn increasing capital values.

READ HISTORICAL PERFORMANCE COMMENTARIES

Product Snapshot

  • Product Overview
  • Performance Review
  • Peer Comparison
  • Product Details

Product Overview

Fund Name APIR Code
? A Product Code is unique a identifier code issued by a group or governing body, to reference products in a large group. For an example, APIR codes are commonly used for Funds and Ticker codes are commonly used for Securities such as ETFs and Stocks.
Structure
?
Asset Class
? An Asset Class breakdown provides the percentages of core asset classes found within a mutual fund, exchange-traded fund, or another portfolio. Asset classes (in microeconomics and beyond) generally refer to broad categories such as equities, fixed income, and commodities.
Asset Category
? An Asset Category is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations. Asset categories (or a sub-asset class) are made up of instruments which often behave similarly to one another in the marketplace, looking down to the Asset Category level is important if looking to build a diversified portfolio.
Peer Benchmark Name
? A Peer Index (benchmark) refers to a peer group of investment managers who have the same investment style or category. It is used to compare the performance of one manager to their peer group, which makes it simpler for investors to choose between the vast number of investment managers.
Broad Market Index
? A Market Index (benchmark) refers to a hypothetical portfolio of investments that represents a segment, asset or category of an investable market. Market Indices are used to benchmark managers performance, to assist their style reliability and ability to provide excess returns.
FUM
? Funds/Assets under management (AUM) is the total market value of the investments that a person or entity manages on behalf of clients. Assets under management definitions and formulas vary by company.
Management Fee
? A management fee is a charge levied by an investment manager for managing an investment fund. The management fee is intended to compensate the managers for their time and expertise for selecting finanical products and managing the portfolio.
Performance Fee
? A performance fee is a payment made to an investment manager for generating positive returns. This is as opposed to a management fee, which is charged without regard to returns. A performance fee can be calculated many ways. Most common is as a percentage of investment profits, often both realized and unrealized. It is largely a feature of the hedge fund industry, where performance fees have made many hedge fund managers among the wealthiest people in the world.
Spread
? A spread can have several meanings in finance. Basically, however, they all refer to the difference between two prices, rates or yields. In one of the most common definitions, the spread is the gap between the bid and the ask prices of a security or asset, like a stock, bond or commodity. This is known as a bid-ask spread.
CFS W Strategic CashFSF0075AUManaged FundsCashAustralian CashCash - Australian Cash IndexRBA Cash Rate Target Index853.32 M0.41%0.00%0%

Performance Review

Fund Name Last Month
? Returns after fees in the most recent (last) month).
3 Months Return
? Returns after fees in the most recent 3 months.
1 Year Return
? Trailing 12 month returns.
3 Years Average Return
? Average Annual returns from the last 3 years.
Since Inc. Average Return
? Average (annualised) returns since inception
1 Year Std. Dev. (Annual)
? The standard deviation (or annual volatility) of the last 12 months.
3 Years Std. Dev. (Annual)
? The average standard deviation (or annual volatility) from the last 3 years.
Since Inc. Std. Dev. (Annual)
? The average standard deviation (or annual volatility) since the fund inception.
1 Year Max Drawdown
? The maximum drawdown in the last 12 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
3 Year Max Drawdown
? The maximum drawdown in the last 36 months - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
Since Inc. Max Drawdown
? The maximum drawdown since inception - a drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund.
CFS W Strategic Cash0.38%1.19%4.76%3.04%3.56%0.08%0.59%0.6%0%-0.2%-0.21%

Peer Comparison

Fund Name Peer Index Name
? A group of individuals who share similar characteristics and interests are called peer groups. Peer group analysis is an essential part of assessing a price for a particular stock in investment research. The emphasis here is on making a comparison, meaning that the peer group constituents should be more or less identical to the company being examined, especially in terms of their main business and market capitalization areas.
12 Months Excess Return
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
Excess Return Annualised Since Inception
? Excess returns are an important metric that helps an investor to gauge performance in comparison to other investment alternatives. In general, all investors hope for positive excess return because it provides an investor with more money than they could have achieved by investing elsewhere.
12 Months Alpha
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market return over 12 months. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
Alpha Annualised Since Inception
? Alpha is used in finance as a measure of performance, indicating when a strategy, trader, or portfolio manager has managed to beat the market annualized since inception. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark that is considered to represent the market’s movement as a whole.
12 Months Beta
? Rolling 12Month Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Beta Annualised Since Inception
? Beta is a measure of the volatility—or systematic risk—of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
12 Months Tracking Error
? 12Month Tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark over the last 12 months. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
Tracking Error Since Inception
? Since Inception tracking error is the difference in actual performance between a position (usually an entire portfolio) and its corresponding benchmark since inception. The tracking error can be viewed as an indicator of how actively a fund is managed and its corresponding risk level. Evaluating a past tracking error of a portfolio manager may provide insight into the level of benchmark risk control the manager may demonstrate in the future.
12 Months Correlation
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
Correlation Since Inception
? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0.
CFS W Strategic CashCash - Australian Cash Index0.21%-0.75%NA%NA%NA%0.60.08%3.62%0.350.18

Product Details

Fund Name Verifed by SMSF Mates Manager Address Phone Website Email
CFS W Strategic CashYesTower 1, Ground Floor, 201 Sussex St,Sydney, NSW, 2000+61 2 93782000https://www.cfs.com.au/-

Product Due Diligence

What is CFS W Strategic Cash

CFS W Strategic Cash is an Managed Funds investment product that is benchmarked against RBA Cash Rate Target Index and sits inside the Cash - Australian Cash Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The CFS W Strategic Cash has Assets Under Management of 853.32 M with a management fee of 0.41%, a performance fee of 0.00% and a buy/sell spread fee of 0%.

How has the investment product performed recently?

The recent investment performance of the investment product shows that the CFS W Strategic Cash has returned 0.38% in the last month. The previous three years have returned 3.04% annualised and 0.6% each year since inception, which is when the CFS W Strategic Cash first started.

How is risk measured in this investment product?

There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since CFS W Strategic Cash first started, the Sharpe ratio is NA with an annualised volatility of 0.6%. The maximum drawdown of the investment product in the last 12 months is 0% and -0.21% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.

What is the relative performance of the investment product?

Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The CFS W Strategic Cash has a 12-month excess return when compared to the Cash - Australian Cash Index of 0.21% and -0.75% since inception.

Does the investment product produce Alpha over its Peers?

Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. CFS W Strategic Cash has produced Alpha over the Cash - Australian Cash Index of NA% in the last 12 months and NA% since inception.

What are similar investment products?

For a full list of investment products in the Cash - Australian Cash Index category, you can click here for the Peer Investment Report.

What level of diversification will CFS W Strategic Cash provide?

CFS W Strategic Cash has a correlation coefficient of 0.18 and a beta of 0.6 when compared to the Cash - Australian Cash Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.

How do I compare the investment product with its peers?

For a full quantitative report on CFS W Strategic Cash and its peer investments, you can click here for the Peer Investment Report.

How do I compare the CFS W Strategic Cash with the RBA Cash Rate Target Index?

For a full quantitative report on CFS W Strategic Cash compared to the RBA Cash Rate Target Index, you can click here.

Can I sort and compare the CFS W Strategic Cash to do my own analysis?

To sort and compare the CFS W Strategic Cash financial metrics, please refer to the table above.

Has the CFS W Strategic Cash been independently verified by SMSF Mate?

This investment product is in the process of being independently verified by SMSF Mate. Once we have verified the investment product, you will be able to find more information here.

How can I invest in CFS W Strategic Cash?

If you or your self managed super fund would like to invest in the CFS W Strategic Cash please contact Tower 1, Ground Floor, 201 Sussex St,Sydney, NSW, 2000 via phone +61 2 93782000 or via email -.

How do I get in contact with the CFS W Strategic Cash?

If you would like to get in contact with the CFS W Strategic Cash manager, please call +61 2 93782000.

Comments from SMSF Mates

SMSF Mate does not receive commissions or kickbacks from the CFS W Strategic Cash. All data and commentary for this fund is provided free of charge for our readers general information.

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Historical Performance Commentary

Performance Commentary - June 30, 2023

Higher official interest rates and bank bill yields heled the Fund to appreciate by 1.09% in the June quarter. This return was 0.19% ahead of the bank bill benchmark.

This rounded off a favourable 12 months of performance in the FY23 year as a whole. Returns were 0.71% ahead of the benchmark over the year, an outperformance that was even better than the long-term average. Active management of the portfolio during a volatile period helped preserve capital and generate pleasing returns for unit holders.

Performance Commentary - December 31, 2022

The change in monetary policy settings in Australia had a meaningful influence on the Fund’s performance in 2022. At the beginning of the year – when official cash rates were close to zero – the Fund was struggling to generate any positive returns at all. The Fund returned 0.94% in the December quarter, however, benefiting from much higher bank bill yields. Pleasingly, returns were ahead of the bank bill benchmark over the quarter.

The improved performance in recent months enabled the Fund to appreciate by 1.48% in the calendar year as a whole. Again, this was ahead of the return from the bank bill benchmark.

Annual returns were well below the 4%+ annualised returns since the Fund’s inception in the late 1990s, but represented a marked improvement from the previous two years. More importantly, given the likelihood of further rate hikes as policymakers continue to battle inflation, the Fund should continue to generate reasonable returns in the year ahead. At the end of December, the Fund’s prospective yield was nearly 4%; almost back in line with the long-term average.

Performance Commentary - September 30, 2022

Net of fees, the Fund returned 0.5% in the September quarter, slightly ahead of the 0.4% return from the bank bill benchmark.

Sharply rising bank bill yields, owing to increases in official interest rates, fed through to improved returns from the portfolio. This was a welcome development following the past two years or so, where emergency low interest rates following the Covid shock resulted in extremely low returns from cash funds.

The widening of residential mortgage backed securities (RMBS) margins slowed during the quarter. Whilst a detractor from the Fund’s performance in recent months, RMBS holdings are well positioned to contribute to the Fund’s total yield in the coming months, assuming credit markets stabilise.

Performance Commentary - June 30, 2022

The Fund returned 0.0% in the June quarter, net of fees. This was broadly in line with the 0.1% return from the bank bill benchmark. Spreads on residential mortgage backed securities (RMBS) continued to widen, which hampered performance and resulted in adverse mark-to-market valuations in the Fund’s RMBS exposures. Positively, the Fund’s RMBS holdings should provide a significant return enhancement going forward owing to higher reference rates and wider trading margins. Accrual on holdings in term deposits is increasing too, providing support to overall performance.

Officials have indicated that policy settings will continue to be tightened in the months ahead. In turn, higher bank bill yields should meaningfully improve the income generation of the portfolio, as underlying investments will earn higher yields. Policymakers have consistently suggested wage price inflation is an important consideration in their policy deliberations. With that in mind, it was interesting to note that wage growth in the March quarter was below consensus expectations and, more importantly, below current inflation levels. This suggests official borrowing costs in Australia might not be raised as high as some forecasters are anticipating.

Moreover, Australia has a high level of household debt relative to most other developed countries. The economy is therefore more sensitive than some others to rising interest rates and mortgage repayment costs. Again, this suggests the Reserve Bank of Australia might not be required to raise official cash rates as substantially as some other countries. Consumer confidence levels in Australia are already subdued and any further increases in borrowing costs might affect discretionary spending. Central bank officials must be mindful of this and will likely be wary of triggering a recession by raising borrowing costs too high and too quickly.

Performance Commentary - March 31, 2022

The Fund declined in value by 0.03% over the quarter, a return that was slightly behind the 0.01% return from the bank bill benchmark. Spreads on residential mortgage backed securities (RMBS) continued to widen, which hampered performance. In fact RMBS spreads have now widened in four of the past five months, resulting in adverse mark-to-market valuations in the Fund’s RMBS exposures and, in turn, negative returns from the portfolio. The moves in the RMBS market largely tracked volatility in the broader Australian credit market, where spreads have risen owing to the prospect of rising borrowing costs and escalating geopolitical tensions. Assuming margins stabilise, the RMBS holdings will provide a significant return enhancement given both the expected higher reference rates and trading margins. Thankfully, accrual on the Fund’s holdings in term deposits and Negotiable Certificates of Deposit provided some support to overall performance.

Performance Commentary - January 31, 2022

The Fund appreciated by 0.03% in January, a return that was 2 bps ahead of the bank bill index benchmark. Accrual on the Fund’s holdings in term deposits and NCDs provided support to overall performance. Following two months of widening, spreads on residential mortgage backed securities were more stable over the month – accordingly, this allocation did not have a meaningful influence on performance in January. Some of the Fund’s excess cash could be deployed in the residential mortgage backed securities market in the months ahead. Collateral performance remains excellent, with repayments being supported by low unemployment, still relatively low mortgage rates, and a rebounding economy. Trading margins are 20-30 basis points wider than the lows in the second half of 2021, and should provide suitable risk-adjusted returns. With this in mind, we await the restart of primary market activity in February. There were no changes to strategy or overall portfolio positioning during January. The aim is to identify and source investments with prospective yields over and above bank bill swap rates. To minimise risk and with capital preservation in mind, there remains a focus on the quality of all securities held in the portfolio. All are AUD-denominated, and are highly rated by ratings agencies as well as our own internal credit analysts.

Performance Commentary - June 30, 2021

The Fund continued to eke out modest gains in the June quarter, rising in value by 0.1% net of fees.

The steady positive return maintained the Fund’s favourable performance track record in the FY21 year. The Fund appreciated by 0.3% in the year as a whole. Despite being well below the Fund’s historic annual returns for the 20+ years since inception, this was a creditable performance relative to the benchmark. The Bloomberg AusBond Bank Bill Index returned just 0.1% over the year; comfortably the lowest annual return on record. FY21 was a very unusual period for Australian money markets – probably the strangest since we started managing assets in this sector in the early 1990s – butpleasingly we were still able to identify investments offering yields over and above bank bill swap rates. Being able to source these securities and blending them together within a diversified portfolio helped drive performance and maintain the Fund’s favourable long-term track record.

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