Earn 3.8%* p.a. yield to maturity with Simple Plus

1. Simple Plus is an ultra-low risk portfolio suitable for a mid to long term holding period. The average monthly drawdown for Simple Plus is -0.14% as of July 2023.

When constructing Simple Plus, the portfolio is optimised for risk-reward ratio. That means the portfolio simultaneously provides you with the best rate possible and protects the downside of your cash.

We construct the portfolio using a mix of reputable, high-quality short and ultra-short duration bond funds with proven track records. The average monthly drawdown for Simple Plus is -0.14% as of July 2023.

The minimal, yet calculable, risk comes from:

• Allocation to short duration bonds in the mix which makes the portfolio slightly more sensitive to interest rate movements and economic conditions. 
• Some underlying funds having a time to maturity and duration, and higher credit risk. The average maturity of the bonds is 1.5 years which means that their full yield is paid out in that time frame. 

Because of these factors, we ​​recommend you hold your cash in Simple Plus for at least 12 months in order to reap the maximum benefits of higher rates while keeping risk in check.

Both Simple and Simple Plus are cash management portfolios. Both have no minimum balance, no cap on the balance that can earn returns, no investment, insurance, or salary requirements, no restrictions on withdrawals or transfers. Simple Guaranteed too! Except there’s a lock-in period.

However, there are some fundamental differences between the three portfolios. 

• The rate: Simple provides a projected rate; an estimate of expected actual returns. 
  Simple Plus provides the yield to maturity, which is the total return anticipated on a bond if held until maturity, inclusive of the interest payments you’ll receive and any difference in the current price of the bond versus its maturity price (which is the same at the point it is issued). Simple Guaranteed’s rate is the most straightforward – it’s guaranteed.
  

• Risk: Both Simple and Simple Plus are ultra-low risk. However, Simple Plus carries slightly more risk in comparison to Simple. This is because it exposes the investor to a slightly higher level risk in order to seek slightly higher returns. What does this “slightly higher risk” mean for an investor? Well, in the span of a year, there is the potential for brief periods of slightly negative returns in the short term, and the same can be said for brief periods of exceptional returns (exceptional for cash management options, of course). Read more on the comparison of the risk of the two portfolios here. Simple Guaranteed has no exposure to market volatility, but is subject to underlying bank risk.
• Recommended holding period: How long you want to keep your cash in Simple is entirely up to you, be it a day, a month or a year. However, with Simple Plus, there’s the potential for brief periods of slightly negative (and positive!) returns in the short term, therefore to reap the full benefit of the rate while keeping risk in check, we do recommend a holding period of at least 12 months. Read more about why here. Simple Guaruanteed in contrast will have a lock-in period (1, 3, 6, or 12 months).

• Management fees: StashAway charges a management fee of 0.15% for Simple, and 0.2% for Simple Plus. There’s no management fee for Simple Guaranteed. And all rates for the three portfolios are net of fees! 

• Risk: Both Simple and Simple Plus are ultra-low risk. However, Simple Plus carries slightly more risk in comparison to Simple. This is because it exposes the investor to a slightly higher level risk in order to seek slightly higher returns. What does this “slightly higher risk” mean for an investor? Well, in the span of a year, there is the potential for brief periods of slightly negative returns in the short term, and the same can be said for brief periods of exceptional returns (exceptional for cash management options, of course). Read more on the comparison of the risk of the two portfolios here. Simple Guaranteed has no exposure to market volatility, but is subject to underlying bank risk.
• Recommended holding period: How long you want to keep your cash in Simple is entirely up to you, be it a day, a month or a year. However, with Simple Plus, there’s the potential for brief periods of slightly negative (and positive!) returns in the short term, therefore to reap the full benefit of the rate while keeping risk in check, we do recommend a holding period of at least 12 months. Read more about why here. Simple Guaruanteed in contrast will have a lock-in period (1, 3, 6, or 12 months).

• Management fees: StashAway charges a management fee of 0.15% for Simple, and 0.2% for Simple Plus. There’s no management fee for Simple Guaranteed. And all rates for the three portfolios are net of fees! 

We encourage you to invest in Simple Plus with a view of holding it there for 12 months or longer, so you don’t have to sell at a loss when faced with short-term volatility, and to allow the funds time to reach their average target yield.

The current YTM is not a guaranteed rate, and is only a snapshot from the underlying bonds in the funds at a given time. Future returns also include the price fluctuations of these bonds. Because of this, there may be situations where overall returns are below or above YTM.