What are the risks involved with Simple Plus?
Simple Plus is an ultra-low risk portfolio suitable for a mid to long term holding period. The average monthly drawdown for Simple Plus is -0.14% as of July 2023.
When constructing Simple Plus, the portfolio is optimised for risk-reward ratio. That means the portfolio simultaneously provides you with the best rate possible and protects the downside of your cash.
We construct the portfolio using a mix of reputable, high-quality short and ultra-short duration bond funds with proven track records. The average monthly drawdown for Simple Plus is -0.14% as of July 2023.
The minimal, yet calculable, risk comes from:
- Allocation to short duration bonds in the mix which makes the portfolio slightly more sensitive to interest rate movements and economic conditions.
- Some underlying funds having a time to maturity and duration, and higher credit risk. The average maturity of the bonds is 1.5 years which means that their full yield is paid out in that time frame.
Because of these factors, we recommend you hold your cash in Simple Plus for at least 12 months in order to reap the maximum benefits of higher rates while keeping risk in check.