What are the risks associated with Cash+ Enhanced?
Cash+ Enhanced is a low-risk portfolio (risk level 1 out of 5), but it's an investment rather than a deposit, so its value can move up and down.
The main factor is interest rates: because it holds short-term bond funds, the portfolio dips slightly when rates rise and gains when they fall. The funds are deliberately short-dated to keep these movements small, and the interest the bonds earn each day helps cushion them but if you withdraw during a stretch of rising rates, you could get back less than you put in.
It also lends to governments and companies through the underlying funds, which carries some credit risk. We manage this by holding only investment-grade bonds and spreading your money across three established fund managers, so no single one has an outsized impact.
Because the value can fluctuate, Cash+ Enhanced is best suited to money you won't need for at least a year.
Is my capital guaranteed with Cash+ Enhanced?
No. Cash+ Enhanced is not capital guaranteed. It is an investment portfolio, not a bank deposit, and its value can fluctuate.
Because it holds short-duration bond funds, the portfolio's value may move up or down with interest rate changes, both when you first invest and while you remain invested. The relatively short blended duration of around two years helps limit this sensitivity, but doesn’t remove it.
