How endowus is able to maintain a 2.7% rate for its endowus cash smart account even now? Do you expect this to continue or is a drop expected in the months ahead? Stashaway simple is already below 2%.?

Hi David, thanks for looking at our CashSmart product. Our projected yields for Cash Smart Core is 0.9 to 1.1%, and Cash Smart Enhanced is 1.7% to 2.0%. Stashaway Simple I was told just revised theirs down to 1.4%. This is all normal. Our numbers are constantly updated to reflect the latest projected yields. Just as banks adjust their deposit rates down or up depending on the interest rate cycle, our cash management solution, Cash Smart has projected yields that fluctuate over time based on market conditions. We have transparently provided the latest projected yields on our website here, and our FAQ section, which also has our monthly numbers updated at least once or twice a month depending on movements in projected yields. We also constantly track the projected yields on a weekly basis and try to update them as often as we can to be transparent by working with our partners and we will keep updating them transparently if there are any changes.​​​

When you invest in Endowus enhanced cash smart, you are effectively investing 50% in the LionGlobal SGD Enhanced Liquidity Fund and 50% in UOB AM United SGD Fund. Endowus will not be able to gaurantee you a certain yield, but instead they can only provide you with information regarding the projected returns based on the funds' existing holdings.

The information are available here:

https://secure.fundsupermart.com/fsm/admin/buy/...

https://secure.fundsupermart.com/fsm/admin/buy/...

What you should be looking for is the "weighted average yield to maturity", which is a reasonable estimate of the funds' expected returns. However, you will also need to take into account the funds' total expense ratio, which Endowus estimates to be around 0.35% after factoring in access fees and trailer rebates.

This "yield to maturity" fluctuates every now and then, and is driven by numerous factors including:

• short-term interest rates, which are in turn largely influenced by monetary policy actions (and also the market's expectations of real economic growth and inflation for longer-term interest rates)

• credit spread, which are in turn influenced by the market's expectations of corporate credit risks

Both of these components have been compressing in the past few months since the bottom of the coronavirus crisis. It is also difficult to predict how these components will change going forward.​​​