Enhanced cash,
without the credit stretch
For wealth managers and finance platforms seeking diversified real yields with low volatility. Target +2% above SONIA.
Prime only. No compromise.
New income source means only prime cash assets meet our standard for allocation:
Investment allocation
Portfolio breakdown
Gilts
<1 year, WAM target x months
CP
<6 months, WAM target x months
Bonds
<12 months, WAM target x months
Asset-Backed Preferred Equities
Reconnecting cash to hard assets. Uncorrelated diversification from interest rates.
Target
Enhancing performance across all critical dimensions of cash management.
Yield
Target: 200+ basis points above SONIA
Liquidity
Bid-Ask Spread: x%
Portfolio Days to Liquidate: <1 day
<x% of Average Daily Volume
Stability
Target: <1*% annualised volatility under normal market conditions
*The mean reversion to par inherent in our asset-backed preferred equities allows us to tolerate temporary exceedances of this volatility target during periods of market stress as the mechanism converts volatility into incremental yield.
Asset-Backed Preferred Share Calculator
Companies that have built substantial asset treasuries often issue yield-bearing instruments to raise low-cost growth capital for further expansion or asset acquisition.
The strength of the balance sheet means any volatility in the underlying assets is effectively “stripped out”, offering investors a stable income stream in return.
A key metric for assessing the sustainability of an Asset-Backed Yield instrument is the “Years of Yield Coverage”, which is how many years a company could continue to fund dividend payments based on the current valuations of its asset treasury.
The assets held in hope GBP currently have 50+ Years of Yield Coverage at today’s prices.
Another key metric is the Required Compound Annual Growth Rate (Required CAGR) of the assets where the issuer can make the yield payments indefinitely.
The required CAGR for the assets held in hope GBP to be paid indefinitely is 2.13%.
Investment Philosophy
Traditional money market funds are designed for capital preservation. Yet over the past 10 years, many have struggled to keep pace with inflation, resulting in negative real returns. Money market yields track interest rates closely, whereas real-world inflation is driven by a broader set of factors — money-supply growth, productivity trends, demographic shifts, and the velocity of money.
We believe the true objective of capital preservation should be to protect real purchasing power indefinitely. We describe this as “Cash Above Inflation” — a money whose value and purchasing power can be stored without decay, forever.
It is not possible to achieve this consistently through money market funds that use interest rates as their primary benchmark, with a near-100% allocation to short-term debt instruments.
By including modest allocations to asset-backed yields, which better capture the fundamental drivers of inflation and economic growth (money supply, productivity, demographics, monetary velocity), we aim to generate consistent positive real returns while keeping volatility cash-like <0.5%.
We believe that
- True capital preservation has never been more important.
- Overnight rates such as SONIA are a poor benchmark for capital preservation. CPI inflation and money-supply growth are far better measures of real purchasing power.
- Pure debt portfolios benchmarked to interest rates limit yields, restrict diversification, and lack resilience across market conditions.
- Asset-backed yields more effectively reflect productivity gains, money-supply growth, and broader economic trends.
- Adding modest allocations of ultra-low-volatility Asset-Backed Yield instruments delivers meaningful, uncorrelated diversification with virtually no increase in overall volatility.
hope GBP combines the stability, liquidity, and accessibility of a traditional money market fund with ultra-low-volatility, high-yield Asset-Backed Yield instruments — targeting a real return of +0.5% above CPI with cash-like volatility <0.5%.
Contact
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