Yellow Brick Road’s (ASX:YBR) joint venture with Coolabah Capital Investments Pty Ltd, Smarter Money Investments (SMI), has been awarded a $50 million institutional mandate and a five-star Morningstar rating.
This represents a 25% increase in funds under management (FUM) that will be split equally across its Smarter Money Active Cash and new Smarter Money Higher Income funds.
Total FUM over both Funds now exceeds $250 million.
In February, SMI’s Smarter Money Active Cash Fund received a “five-star” Morningstar Rating based on its assessed 3 year risk-adjusted performance within the Morningstar Peer Group - Australian Short Term Fixed Interest – Investment Trust, since February 2012.
On 16th March 2015, Yellow Brick Road and Coolabah extended their existing contractual arrangements with a focus on launching additional funds management products in the future that meet the needs of Australian savers.
“Smarter Money Investments has emerged as one of Australia’s leading fixed-income boutiques and Yellow Brick Road is proud to have contributed to that success and to have brought the benefits of their savings solutions to our clients,” said YBR chief executive officer Matt Lawler.
"Our commitment to an active, value-based investment style and a deep, six person investment team has delivered a highly competitive treasury solution for individuals, advisors, companies and institutions, and this is being recognised as our three year track-record builds." SMI co-chief investment officer Darren Harvey said.
Smart Money Investments
SMI was established in October 2011 by YBR and Coolabah Capital Investments Pty Ltd, each of which hold a 50% interest.
Yellow Brick Road provides SMI with marketing, retail and wholesale distribution and accounting and management services while Coolabah supplies its portfolio management team.
SMI, which launched its first product – the Smarter Money Active Cash Fund – in February 2012, gives YBR’s branch network access to leading savings and investment solutions that complement traditional savings products.
Since 2011, it has delivered important benefits to a growing number of Yellow Brick Road Branch clients around Australia by providing them with a superior performing savings solution at a time when the interest rates on cash deposits have fallen dramatically.
This extension means that Smarter Money Active Cash Fund, a low-risk solution, is also now being used by a number of the Vow Financial brokers, who are part of the broader Yellow Brick Road Group.
The joint venture will also deliver innovative new products which address the unmet needs of ordinary Australians and will further expand the service offering of Yellow Brick Road branches.
Performance
Over the 12 months to 28 February 2015, SMI’s Smarter Money Active Cash returned 4.1% to its wholesale investors after all fund fees, which was substantially superior to the RBA’s cash rate, which is currently 2.25%
Since inception 3 years ago, Smarter Money Active Cash has returned over 5.4% per annum after all fees.
The Fund has a well-diversified portfolio of around 20 ADI cash deposits and 30 floating rate notes, with a return volatility over the last 12 months of a low 0.33%. It maintains a very low interest rate risk (modified duration) on its floating rate note portfolio - currently less than one month.
This out-performance has just contributed to SMI winning the new $50 million institutional mandate.
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