Most businesses will have some level of cash reserves sitting in the bank. It often makes good sense to have an amount to draw on in times where a monetary injection might be needed, whether for a rainy day or to advance the business.
Of course, this may not be the case for all companies, particularly start-ups where money can be tighter in those first few years. However, for those sitting on a company nest egg, no matter how small or large, it might be time to start looking at ways to make that money work harder.
With interest rates historically low (0.1% since March 2020), and unlikely to budge significantly this year, you may want to consider an alternative to locking your cash up in a savings account.
We aim to provide a wide range of services to suit all our valued corporate clients’ needs, extending from employee benefits and corporate protection, through to helping you grow that all-important savings pot. Here at Brunsdon Financial, we often discuss the benefit of personal wealth being managed through a fund but did you know that this can also be the case for your company reserves?
What’s the benefit of investing?
You might be wondering why take the risk? Your money is sitting safe in a bank account and although it might not be amassing much in terms of interest, you may appreciate that it’s in a secure environment. However, it’s worth considering the rate of inflation.
In May, inflation rose to 2.1%, reportedly the highest it’s been for nearly two years. Now, consider your interest rate in the bank or building society of 0.1%. With inflation at its current level, that means that in real terms your lump sum would actually be decreasing in value by 2%.
As an alternative, you may want to consider putting 20% of your savings into a low-risk fund. The TM Brunsdon Cautious Growth Fund is ideal for those who are more risk-averse but still want to gain decent returns.
A careful but worthwhile approach
A fifth (20.77%) of the TM Brunsdon Cautious Fund is made up from global fixed investments, helping to provide stability over time. A further 16.71% and 14.56% is made up of UK Corporate and International investments respectively, with the rest of the fund composition spanning a diverse range of areas.
Since it launched in January 2015 up until March 2021, our Cautious Fund increased by 22.41%, giving an average of 3.735% growth per year; meaning that by taking this route, you could increase your cash sum by at least the rate of inflation, and have a little extra too. You’ll also get a personalised report detailing your chosen investment route and forecast for the years ahead, as well as a meeting with one of our dedicated Financial Advisors.
Want to find out more?
To discuss your company’s unique situation and to find out how it might benefit from the TM Brunsdon Cautious Growth Fund, please get in touch with your Brunsdon Financial Consultant. They can introduce you to one of our Financial Advisors, who will work with you to create a dedicated growth plan.