ADDX introduces Cash Management Tool ADDX Earn
ADDX has introduced a cash management tool for investors, which consists of a solution that aims to withstand short-term volatility while preserving capital.
The new ADDX Earn will provide yet another option to investors with excess funds in their wallets to earn interest, instead of their funds sitting idle, according to the statement.
Per the private market exchange company, ADDX Serve has been built to increase investors’ returns placed in their ADDX wallets and has yet to decide which private market product to take part in. It added that some of the free capital may also have come from previous investment earnings on ADDX.
The plan with the new management tool is also to beat short-term bank deposit rates by providing higher target returns for products under ADDX Earn. Many investors usually store unused capital in short-term bank deposit interest.
“The first two funds launched under the ADDX Earn umbrella are by Lion Global Investors, a fund manager that is part of the OCBC Group,” ADDX said.
The two funds, called LionGlobaI SGD Enhanced Liquidity Fund and LionGlobaI USD Enhanced Liquidity Fund, are diversified across a range of issuers and issuers through investments in high-quality portfolios of debt instruments.
“The two funds have weighted average portfolio durations of less than one year, giving Lion Global the flexibility to adjust portfolio allocations in response to changing interest rates and market conditions,” ADDX said.
According to ADDX, investments can be redeemed on a weekly basis.
The funds also target assets with low volatility. These are being done as they are “well suited” to the current market environment which has seen increased volatility in other asset classes, ADDX announced.
Interest accrues daily for both funds. As at 31 July, the LionGlobaI SGD Enhanced Liquidity Fund had a weighted average yield to maturity of 2.22% pa, while that for the LionGlobaI USD Enhanced Liquidity Fund was 2.38% pa. These prices change monthly depending on the current interest rate environment and the underlying. assets held by the funds.
Gerard Lee, CEO of Lion Global Investors, said: “Our liquidity funds are typically used by financial advisors and digital players. We are therefore delighted to have a private market exchange using our liquidity funds to provide a solution for investors’ excess cash.”
The SGX-backed ADDX was founded in 2017. It currently serves individual investors from 39 countries across Asia-Pacific, Europe and the Americas – excluding the US.
The company has adopted blockchain and smart contract technology to reduce manual intervention in the issuance, custody and distribution of private market products.
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