Evelyn Partners has launched its Cash & Cautious Bond portfolio service to UK financial advisers, providing a discretionary investment option designed to offer enhanced returns on cash holdings while maintaining low risk during a period of falling interest rates and global uncertainty.
Originally offered to Evelyn Partners’ direct clients from 2023, the strategy is now available to advisers for use with clients requiring capital preservation and liquidity. The portfolio invests in a mix of liquid, short-dated instruments including cash deposits, money market funds, UK Treasury bills, gilts and bonds issued by highly rated global institutions.
The strategy targets a return above those available from traditional cash accounts, aiming to reduce interest rate and credit risk while offering broader diversification than cash management or gilt ladder products. Investments are actively selected from a pre-approved list and tailored to individual liquidity needs and investment timelines.
Matthew Spencer, head of intermediaries at Evelyn Partners, said: “Our Cash & Cautious Bond strategy has been a widely welcomed solution over the past couple of years for direct clients of Evelyn Partners looking for a home for substantial cash balances. Savings accounts are already seeing reduced returns and with central banks expected to continue to cut benchmark rates, as we saw last week with the latest reduction by the Bank of England, this is set to continue.
“There’s a window of opportunity for financial advisers to lock in elevated short-term bond yields for their clients as part of a diversified and low-risk strategy. Current global economic uncertainty and volatile equity markets mean many clients are also looking for somewhere to earn an enhanced return compared to cash, while they wait until the macroeconomic outlook becomes clearer before putting money to work in riskier assets.”
The Cash & Cautious Bond portfolio service has an annual management fee of 0.15%, made up of a 0.10% custody fee and a 0.05% investment management fee. The firm does not apply transaction charges or commissions and invests directly in underlying instruments to minimise costs. All assets are held on Evelyn Partners’ custody platform in nominee accounts.
The strategy is rated as level 1 on Evelyn’s internal seven-point risk scale. It has no upper investment limit and permits top-ups at any time. Underlying assets are liquid and can be sold quickly if needed. The firm recommends a minimum investment size of £500,000.
Ian Kenny, investment management partner and head of fixed income at Evelyn Partners, added: “Interest rates and bond yields have been on quite a journey, moving from all-time lows to decade highs over the past few years, and that has fundamentally changed the landscape for savers and asset allocators at the short end.
“Now is a great time to be having conversations about cash or near-cash to make sure that cash balances are well-mapped to need and preference and are working as hard as they can be. The disciplined Cash & Cautious Bond framework allows us to build bespoke portfolios to suit each client’s needs and preferences but within a structure that is mindful of and limits interest rate, credit and liquidity risks.”