Short Term Investments

This is no ordinary team

Cash markets have evolved over the past 3 decades. Interest rates have moved considerably lower and new securities have emerged. Through time our approach has also evolved – our success lies in continuous innovation.

A steady hand often gets the best results

Meet Tony Togher

This early bird has been to the gym and digested the overnight market news hours before Australian markets have opened. Tony Togher explains his morning routine and why discipline is important for investors.

Cash markets continue to evolve

Some might remember the RBA cash interest rates being 18% thirty years ago and the unpredictability of central bank policy around that time. More recently, official cash rates in Australia have been cut to an all-time low of 1%.

This unprecedented level of monetary policy easing has important implications for cash funds. New types of ‘cash’ securities also tend to be issued as regulations change. Managing portfolios effectively through long-term market cycles requires an investment style that’s flexible enough to evolve with the market itself.

The evolution of Australian interest rates

Source: Reserve Bank of Australia Cash Rate Target. Bloomberg, 1 January 1980 to 31 July 2019
In a low interest rate environment, some of the strategies that delivered 10 years ago won’t be as effective today. If you haven’t already innovated, you’re behind.
Tony Togher
Head of Short Term Investments & Global Credit

Over the past two decades, we are one of the top performing cash strategies in Australia across all time periods

Performance of the CFS Wholesale Cash Fund against the Australian cash universe*

Colonial First State Wholesale Cash Fund
6 months
1 year
2 years
5 years
10 years
20 years
Colonial First State Wholesale Cash Fund
1
1
1
1
2
2
* Performance rankings in this table are sourced from the eVestment Australian Cash (Cash) Sub-Universe as at 30 June 2019 and are evaluated gross of fees. The peer group in the survey currently consists of 17 products, managed by 13 different investment management firms. Past performance is not indicative of future performance.

The CFS Wholesale Cash Fund name will be changed to reflect the new brand name in mid-2020. It will be referred to as the Fund on this webpage.

Cash never goes out of style

The right exposure to cash within a diversified investment portfolio depends on an investors’ time horizon and their reasons for holding cash within a broader investment mix.

Investors able to forecast their cash flow requirements typically allocate strategically to higher yielding, income-style investment options.

Cyclically, the case for cash is dependent on the relative value of other asset classes.

Because the investment profile of cash is unlikely to change significantly over any given 12 month period, the use of cash reflects investors’ short-term risk appetite and expected returns elsewhere.

Get more from a cash exposure

The cash investment umbrella

The value of active management

All of these security types carry some level of investment risk. It isn’t possible to eliminate these risks completely, but they can be mitigated through active duration management, in-depth credit research, portfolio diversification and ongoing monitoring.

Target consistent outperformance

The most important thing to bear in mind is that expected returns adequately compensate investors for the risks. We believe managing this trade-off using a proven investment process flexible enough to respond to structural shifts in the market can help generate consistent outperformance over the short, medium and long term.

Different investors have varying exposure to cash, depending on their liquidity requirements, investment goals and risk tolerance.
Tony Togher
Head of Short Term Investments & Global Credit

A different take on markets in 2019

Tony Togher shares his market outlook, explains the key drivers of performance in our funds and how portfolios are currently positioned.