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The definition of Cash may surprise you !

What is cash ? If that seems like a silly question, then consider this.

In an effort to increase yields, many funds and asset managers have expanded their “cash” holdings to include hybrid instruments and other instruments that have a higher rate of return, and this is disclosed as Cash on their holdings. Not acceptable says APRA.

Under the reasonable expectations principles as set out in SPS 530 Investment Governance, APRA considers that a superannuation fund member would understand that exposure to a

‘cash’ investment option or product will be readily accessible (for withdrawal or transfer) without change in value.

This aligns with APRA’s definition of cash under Superannuation Reporting Standard (SRS) 530 Investments (drawn from AASB 107) which states that ‘cash’: ‘Represents cash on hand and demand deposits, as well as cash equivalents. Cash equivalents represent short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.’

So, when considering investments in non cash equivalents, the key question to consider would appear to be: will my cash be  readily accessible (for withdrawal or transfer) WITHOUT change in value !!!

i.e what circumstances will cause the nominal value to change, e.g equity markets, interest rates etc.


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