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What's New In Investments, Funds? – ADDX
The latest news on investment offerings, financial products and other services relevant to wealth advisors and their clients.
Singapore-based digital private market exchange ADDX has launched a cash management tool that allows investors with excess funds in their wallets to earn interest. Named ADDX Earn, the solution aims to withstand short-term volatility while preserving capital.
The product line was developed to boost returns of investors who have deposited money in their ADDX wallets, but have yet to decide on which private market product to take part in. Some of the idle capital may also have come from previous investment earnings on ADDX.
Target returns for products under ADDX Earn are designed to be higher than short-term bank deposit rates – which is where many investors otherwise store undeployed capital.
The first two funds to be launched under the ADDX Earn umbrella are by Lion Global Investors, a fund manager that is a part of the OCBC Group, ADDX said.
ADDX, which uses digital technology to widen access to private market investments, has made several agreements and raised capital to sustain growth. Founded in 2017, ADDX uses blockchain and smart contract technology to automate manual processes that in the past made it inefficient for private market securities to be distributed to investors. ADDX said the efficiencies from tokenizing securities enable it to slash minimum investment sizes from $1 million to $10,000.
ADDX is part of a wider trend of firms using technology to make it easier for investors to enter the space. (See here for an article about the work ADDX is doing with China Construction Bank.)
The LionGlobaI SGD Enhanced Liquidity Fund and LionGlobaI USD Enhanced Liquidity Fund are invested in high-quality portfolios of debt instruments, diversified across a wide range of issuers and tenors while maintaining weighted average credit ratings of “A.” The two funds have weighted average portfolio durations of less than a year, which gives Lion Global the flexibility to adjust portfolio allocations in response to changing interest rates and market conditions. Investors can redeem their investments weekly through ADDX.
For both funds, interest is accrued daily. As of 31July 2022, the LionGlobaI SGD Enhanced Liquidity Fund had a weighted average yield to maturity of 2.22 per cent a year, while that of the LionGlobaI USD Enhanced Liquidity Fund was 2.38 per cent per year. These rates change monthly depending on the prevailing interest rate environment and the underlying assets held by the funds.
Founded in 2017, the SGX-backed ADDX currently serves individual accredited investors from 39 countries spanning Asia-Pacific, Europe and the Americas (except the US).