UBS Cash Fund

May 2018

Fund description Fund information

The Fund is an actively managed portfolio of predominantly Inception date 11 May 1989
investment grade Australian cash and money market Fund size $1,133.1 m
securities. Management fee 0.25% pa
Investment objective Minimum initial investment $20,000
This Fund aims to provide investors with a total return Distribution frequency Monthly
(before management costs) equivalent to the Bloomberg Buy/sell spread +/- 0.00%
AusBond Bank Bill Index over rolling 12 month periods. APIR code SBC0811AU
Portfolio statistics Fund Benchmark As at 31 May 2018

Modified Duration (yrs) 0.19 0.13

Fund positioning
Yield to maturity (%)
1
1.99 1.85 Cash
Average rating AA
Time Deposits
As at 31 May 2018 Certificates of Deposit 74%
1
Yield to Maturity (YTM) is the estimated annualised rate of return that would Floating Rate Notes
be received if the Fund’s current securities were all held to maturity. Note that Commercial Paper 2%
YTM does not account for fees or taxes. YTM is not a forecast, and is not a
Commercial Paper
guarantee of the future return of the Fund. Floating Rate Notes 10%

Credit quality (%) Fund Certificates

11am Cash of Deposit
Deposit 9%

Long term Cash 5%

AA 7
A 3
As at 31 May 2018
Short term
A1+ 51
A1 36
A2 3
As at 31 May 2018

Investment performance
As at 31 May 2018
1 month 3 months 1 year 3 years 5 years Since inception*
Fund
% % % % pa % pa % pa
Total return 0.16 0.44 1.68 1.87 2.15 5.63
Benchmark** 0.17 0.48 1.78 1.95 2.24 5.83
Added Value (0.01) (0.04) (0.10) (0.08) (0.09) (0.20)
*Inception date: 11 May 1989. **Bloomberg AusBond Bank Bill Index.
Performance figures are net of ongoing fees and expenses. Performance has been prepared in accordance with 2016 GIPS standards. The performance figures
quoted are historical, calculated using end of month redemption prices, and do not allow for the effects of income tax or inflation. Total returns assume the
reinvestment of all distributions. Performance can be volatile and future returns can vary from past returns.
 Market highlights
• Geopolitics trigger a risk-off move in global financial markets
• High-rated developed government bond markets gain with risk-off sentiment
• US Fed, Bank of England and RBA leave policy settings unchanged

After fees and expenses, the portfolio increased by 0.16%
over the month, underperforming its benchmark by 1bp.
The Reserve Bank of Australia (RBA) left the target cash
rate unchanged at 1.5% in May. In its latest Statement
of Monetary Policy, the RBA revised its forecast of the
unemployment rate for 2018 to 5.5%, higher than
the previous forecast of 5.25%. The RBA upgraded its
forecast for underlying inflation from 1.75% to 2.0% but
maintained its GDP growth expectations at 3.25% by the
end of 2018. In terms of monthly data releases, 22,600
jobs were added over April and the unemployment rate
stepped up to 5.6%. NAB business conditions and business
confidence both registered a rise. The latest retail sales
figures showed flat growth month-on-month. Building
approvals recorded another monthly drop falling 5.0%,
while auction clearance rates fell below 60%. Private sector
credit growth was at 0.4% over the month. The AUD
was up slightly over the month, gaining 0.50% to close
US$0.7568 at the end of May.
The broader global cyclical recovery continues but there
are signs of desynchronised growth and inflation conditions
across developed economies. Financial conditions continue
to be accommodative as global central banks look to a
carefully considered path of monetary policy normalisation.
Concerns around political instability in Italy have added
We maintain the view that the RBA is likely to remain on
hold given expectations of a slow and gradual pick-up in
inflationary conditions.
In the US, labour market conditions continue to strengthen
and the unemployment rate has registered below 4%.
Wages growth is moderate but lags due to structural
factors. Core inflation measures are moving higher and the
latest core PCE release is at the Fed's 2.0% target, albeit
driven partially by transitory influences. Trade tensions
and political positioning remain potential risks to the US
economic outlook, particularly given the latest proposed
tariffs on metal imports. We continue to expect the path
of tightening to be broadly in line with the Fed's median
projections, with two more policy adjustments likely over
2018 following the increase earlier this year.
In Europe, an announcement of a further tapering in the
ECB's asset purchase programme is expected in June
for later in 2018. Monetary policy settings are expected
to remain accommodative for an extended period.
Central banks in the UK and Canada are on the path of
policy normalisation, although recent communication
has reiterated the very gradual and cautious approach
to removing policy accommodation to ensure growth
conditions remain supported.

to the recent re-emergence of geopolitics as a key macro
thematic.
In Australia, inflationary measures continue to print below
the RBA's desired levels and wages growth remains low.
Australian employment conditions are resilient but growth
has slowed over recent months. Growth remains positive
with support from business and investment conditions
but is expected to be marginally below trend. The
housing market is showing signs of moderation, helped
by macro-prudential measures. The recent heightened
level of scrutiny of the Australian banking sector may see
household credit conditions tighten. Wholesale funding
costs have also risen in response to increases in Australian
short term money market rates over the last few months.
© UBS Group AG 2018. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.
Within credit, global credit spreads continue to reprice
wider but Australian markets remain better positioned
relative to offshore counterparts. Markets are supported
by positive growth and still accommodative policy settings
but headwinds are appearing. Investors are reacting to
technical factors as well as broader market volatility and
sentiment. We continue to be discerning in both industry
and security selection.
Client Services
Telephone: (03) 9046 4041
Freecall: 1800 572 018
Email: ubs@unitregistry.com.au
www.ubs.com/am-australia

Investors should consider the PDS and seek professional financial and taxation advice before deciding whether the product is appropriate for them and whether to
acquire, or to continue to hold the investment. Your investment in the Fund does not represent deposits or other liabilities of UBS or any member company of the
UBS Group including UBS Asset Management (Australia) Ltd (ABN 31 003 146 290) (AFS Licence No. 222605), the issuer of the Fund. Your investment is subject
to investment risk, including possible delays in repayment and loss of income and capital invested. The repayment of capital or income is not guaranteed by any
company in the UBS Group. Offers of interests in the Fund are contained in the Product Disclosure Statement dated 20 November 2017. The PDS is available from
our website www.ubs.com/am-am-pds or by calling (03) 9046 4041.
The PDS for this fund is only available to persons receiving the PDS (electronically or otherwise) while physically in Australia, unless expressly authorised by us
in writing. The offer does not constitute an offer or invitation in any place in which, or to any person to whom, it would be unlawful to make such an offer or
invitation. This Fund (or the PDS) has not been registered under the laws of any jurisdiction outside Australia. The Fund may not be offered or sold in the United
States of America or to ‘U.S. Persons’ (as defined in ‘Regulation S’ of the Securities Act of 1933, as amended).
This document may not be reproduced or copies circulated without prior authority from UBS Asset Management (Australia) Ltd.
The Professional Planner | Zenith Fund Awards are determined using proprietary methodologies. Fund Awards were issued October 6, 2017 and are solely
statements of opinion and do not represent recommendations to purchase, hold or sell any securities or make any other investment decisions. Fund Awards are
current for 12 months from the date awarded and are subject to change at any time. Fund Awards for previous years are referenced for historical purposes only.