The cash management tool is essentially a money market account where investors could park their cash and receive (currently) a 1.9% annual return. Called “Stashaway Simple”, it was launched in response to clients who have been “frustrated” with other cash management options, which have often misled clients over their rates of return, according to a statement from the firm.
“My clients frequently share with me their frustrations about the limits on promotional rates, the hassle of monitoring maturity dates of deposits and the spreads that private banks take, which make money-market funds unattractive, ” Joyce Liu, Stashaway’s wealth advisor for HNWI and institutions shares, said in the statement.
She believes there is a common misconception that a savings account’s entire balance can earn up to 3.5%.
However, some savings accounts have confusing tiered interest rates that require customers to satisfy multiple criteria, including salary credits, credit cards and minimum monthly expenditures, the statement said.
For fixed deposit accounts, they may offer returns of around 1.5-2.1% annually, but have a lock-up period of up to 12 months.
According to the statement, the account has no lock-ups or restrictions on transfers and does not require investors to meet conditions to earn the projected rate, which is currently 1.9%.
The client’s cash is then invested in two money markets funds: the Lion Global SGD Money Market Fund and the Lion Global SGD Enhanced Liquidity Fund – SGD Class I, according to the statement.
There are no management fees for investors who use the cash management account. But the statement noted that there is an expense ratio that the unit trust manager charges and that fee is embedded in the projected return of Simple.
The statement added that investors do not need to invest in Stashaway’s portfolios to use the cash management account.
Diversified product offering
In September, Stashaway rolled out a stand-alone Singapore dollar-denominated income portfolio that invests in ETFs.
The portfolio aims to provide investors with an annual income of 3.75%.
Launched in 2016, Stashaway now has around 100,000 users, according to the statement. The spokeswoman declined to give AUM figures.
Other Singapore-based robo-advisors have also diversified their offerings.
For example, Syfe most recently added human financial advice to its algorithm-driven investment platform, in a move to “challenge exclusive, sophisticated and expensive wealth management solutions”, according to a statement from the firm.
Kristal AI, meanwhile, has been adding new ETFs every month to its platform, some of which offer exposure to asset classes that are not usually offered in Asia, such as stocks in the cannabis and uranium sectors. Kristal AI now has 6,000 users across Asia, the Middle East and the Americas and manages around $90m in assets.
