Evelyn Partners has announced the launch of its Cash & Cautious Bond strategy into the financial adviser market.

The discretionary portfolio management service invests in a bespoke and flexible selection of liquid, high-quality, and low-risk cash-adjacent securities and shorter-dated bonds, aiming to beat cash account returns.

Evelyn Partners said its bespoke Cash & Cautious Bond portfolios offer greater diversification than many other near-cash strategies and gilt ladder services, incorporating cash deposits, money market instruments, gilts, and bonds issued by global organisations with strong credit ratings.

The portfolios can be tailored to individual clients’ timescales and drawdown requirements, and is available to the adviser market for an ongoing fee of 0.15 per cent per annum covering portfolio management and custody.

The wealth management firm said the bespoke service would help advisers and their clients navigate a period of global uncertainty and falling interest rates.

All assets are held in nominee accounts, and the strategy was first made available to Evelyn Partners’ direct clients two years ago.

“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,” commented Evelyn Partners head of intermediaries, Matthew Spencer.

“Cash accounts can also leave clients exposed to tax on interest, with additional rate taxpayers having no personal savings allowance and higher rate taxpayers only able to receive £500 of interest tax free each year. The Cash & Cautious Bond service can provide an element of tax-efficiency through the inclusion of bonds that are exempt from capital gains tax.

“We feel our Cash & Cautious Bond strategy offers a more sophisticated solution to addressing the headwinds for savings rates than any other comparable service on the market - such as cash management services and gilt ladders - as it uses a more diverse and flexible range of instruments, with the potential for enhanced returns.”

Evelyn Partners investment management partner and head of fixed income, Ian Kenny, added: “Interest rates and bond yields have been on quite a journey, moving from all-time lows to decade highs over the last 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.

“We can optimise the shape and balance of each portfolio by considering, among other factors: likely need for ongoing current near-term liquidity, target-date or liability-matching objectives, high or low coupon preferences and appetite for extending into market yields beyond the immediate term.”

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