Tiger Vault adds a new money market fund. Most comprehensive cash management platform?

What is Tiger Vault?

Tiger Vault is a cash management solution by Tiger Brokers. It offers you a way to earn a potentially higher yield on your spare cash by investing in various mutual funds with relatively stable returns, low risk ratings and high liquidity. 

What does Tiger Vault invest in?

There are currently seven money market funds that are available on Tiger Vault.

There are two funds that are recommended by Tiger Brokers, including the Fullerton USD Cash “A” Acc and the Fullerton SGD Cash “A” Acc. 

The Fullerton USD Fund offers an annualized 7-day yield of about 4.74%, while the Fullerton SGD Fund offers a yield of about 3.93% as of 12 April 2023. 

Apart from these two recommended funds, Tiger Vault also offers four funds from Lion Global Investors, including the Lion Global SGD Money Market “A” SGD Acc, which offers an annualized 7-day yield of 3.56% as of 12 April 2023. 

More recently, Tiger Vault also introduced the Eastspring Cash Fund SGD Acc, which offers an annualized 7-day yield of 3.89% as of 12 April 2023. 

Based on the yields shown above, the Eastspring Cash Fund’s yield is quite close to the Fullerton SGD fund, and above the Lion Global SGD Money Market fund. 

We decided to take a closer look into the Eastspring Cash Fund, to understand what are the differences compared to the Fullerton SGD Cash Fund. 

Like the Fullerton SGD Cash Fund, the Eastspring Cash Fund aims to provide liquidity to investors and provide a return that is comparable to that of Singapore-dollar savings deposits. 

However, the Eastspring Cash Fund has a smaller asset under management (AUM) compared to the Fullerton Cash Fund. 

According to its latest factsheet, the Eastspring Cash Fund has a fund size of S$57.8 million as of 28 February 2023,

This is much lower than the AUM of the Fullerton Cash Fund, which has a fund size of S$2.47 billion as of February 2023. 

The Eastspring Cash Fund has an annual management fee of 0.20% currently. This is higher than the annual management fee of the Fullerton Cash Fund, which has an annual management fee of 0.10% currently. 

This might be one of the reasons contributing to the slightly lower yield of the Eastspring Cash Fund compared to the Fullerton Cash Fund. 

What are the advantages of Tiger Vault?

#1 - Relatively safe investment option

According to Tiger Brokers, one of the benefits of Tiger Vault is that the risk of negative return on any one day is low, as the underlying funds invest in safe assets like fixed deposits and government bonds. 

Looking at the historical returns of Fullerton Cash Fund since its inception in 2009, there has not been any negative monthly return.

Fullerton is a reputable fund management company and part of Seviora, a holding company established by Temasek. NTUC Income is also a minority shareholder of Fullerton. 

#2 - Low-cost 

The other benefit is that this is a low-cost investment option as subscription and redemption fees are zero. 

The fee incurred lies mainly in the expense ratio of the funds. For example, the Fullerton Cash Fund has an expense ratio of 0.15% for financial year ended 31 March 2022. 

#3 - Start with a small amount

You can invest from as low as $1, which is great if you want to start with a small amount. 

#4 - Flexible

Tiger Vault is highly liquid. There is no lock-in period and you can use your funds in Tiger Vault to pay for investment products on the Tiger Brokers platform with no lag time. 

However, do note that you can only use 99% of your balance in Tiger Vault to pay for investments. This is to provide a buffer for any changes in the value of the underlying funds and foreign currency exchange rate fluctuation. 

What are the risks of Tiger Vault?

#1 - Not capital guaranteed

Tiger Vault is not capital guaranteed. While the primary objective of the cash management fund is to achieve a return that is comparable to the SGD savings deposit rate, there is effectively still a chance that there could be a negative return in a single day in some extreme cases. 

#2 - Not insured under SDIC

Deposits into Tiger Vault are not insured under Singapore Deposit Insurance Corporation Limited (SDIC).

What is Tiger Vault Auto-Sweep?

You may have noticed an option to set up Auto-Sweep within Tiger Vault. 

When you opt-in to the Auto-Sweep feature, Tiger Brokers will sweep your cash balance into Tiger Vault. 

You will need to select one fund per currency when setting up Auto Sweep. 

If you would like to pause Auto-Sweep, you may choose to pause for 3 days, 7 days, 10 days or just pause indefinitely and restore whenever you want.

What would Beansprout do?

If you are looking for another place to park your idle cash, the Tiger Vault would be another option to explore.

It offers you the following advantages:

• Quick subscription and redemption as the funds can be withdrawn at any time
• Relatively safe underlying fund selection investing in Singapore dollar deposits 

Compared to other cash management accounts, Tiger Vault offers the widest selection of money market funds to choose from. This would include the Eastspring Cash Fund, which was recently added to Tiger Vault.