Elston Portfolio Management has launched a money market model portfolio service following a surge in demand from advisers for low-risk, shorter-term investments.
Money market funds can be considered an alternative to platform cash or bank deposits and give investors the opportunity to access instruments such as cash, time deposits, certificates of deposit, commercial paper, floating-rate notes and short-dated government bonds directly through a fund.
Elston Portfolio Management said the new MPS will provide a diversified selection of money market funds from leading asset managers. But whilst the underlying holdings within money market funds are very similar, the number of funds within the portfolio is intended to ensure that client holdings in a single fund do not exceed the Financial Services Compensation Scheme limit of £85,000.
The management fee for the portfolios is 0.05% and the blended ongoing charges figure of the portfolio is 0.13%. The blended yield of the portfolio is currently 5.3%.
The firm said the portfolios will be initially available on nine platforms, including the P1 Platform, with further platforms to be added in the future at the request of advisers.
Scott Adams, head of adviser relations at Elston Consulting, said: “With the Bank of England rate skyrocketing from 0.1% to 5.25% in the last 20 months and broader concerns around the direction of the markets, there is growing appetite from advisers and their clients for low risk, yield-focused investments that can be held on platform and closely match the Bank of England rate.”
Henry Cobbe, head of research at Elston Consulting, said there had been growing demand from the firm’s adviser clients for a fully managed solution.
“Value for money is key for low-risk assets to ensure consumers do not lose yield to fees. We are delighted that Elston Portfolio Management has now made this innovative cost-effective portfolio available for UK advisers,” he said.
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