- Is the CashPlus Fund likely to have lower returns now that it is even more conservative (than when it was the Defensive Fund)?
Frequently Asked Questions
Is the CashPlus Fund likely to have lower returns now that it is even more conservative (than when it was the Defensive Fund)?
The new CashPlus Fund has a lower risk indicator and therefore a lower expected volatility than the previous Defensive Fund.
However, given that the CashPlus Fund is new, risk indicators have been based off market performance rather than directly on the Fund’s performance.
A lower risk indicator would generally imply lower returns, however, our research into defensive funds that have higher allocation towards fixed interest suggests that they often underperform compared to cash funds with higher allocations to cash and cash equivalents, in certain market conditions.
This key point is that this fund is less likely to see negative returns, hence it’s more defensive than the previous version of this fund.