How safe are the SWIP Global Liquidity Funds?
The objective of money market funds is to provide price stability, security of capital and provision of liquidity. The conservative investment guidelines and fund restrictions are designed to minimise interest rate risk and maintain a stable net asset value. Such restrictions include a maximum of 5% per counterparty in any asset longer than the overnight, thereby limiting any impact of a default. However like bank deposits they are not 100% guaranteed and the investment risk is borne by the investor. We have a robust counterparty credit research process and only invest in highly rated names as set out in the fund guidelines. This together with the strict investment controls limits the risk to the fund. Since the launch of the Fund there has not been a default in any asset held in the Fund.
