Cash ain't king compared with multi-asset funds
Beat inflation by up to three points through smarter investments
Income-unit trust funds that invest across bonds, cash, listed property and other asset classes that earn interest, offer investors a low-risk, liquid alternative to investing in a bank deposit or money-market fund with potential to earn inflation-beating returns. The recent interest-rate cut - to shave another 0.25 percentage points off money-market returns and interest income when you renew a fixed deposit - may prompt you to look for a higher-earning alternative. While cash investments barely beat inflation especially after tax, multi-asset income funds are capable of delivering a return of two to three percentage points above inflation and rarely lose money over periods of more than three months, says Francis Marais, a senior research and investment analyst at Glacier by Sanlam. A less risky investment strategy The investor outlook in cash is not good due to more expected interest-rate cuts, but managers of multi-asset income funds are still finding opportunities to earn returns...
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