Turning idle money into smart money
While daily cash needs are often satisfied by bank and savings account balances, cash-alternative solutions within investment accounts serve different but equally important purposes from a strategic, psychological, and practical standpoint.
Cash-alternatives refer to low-risk, highly liquid investment vehicles that are used as substitutes for holding physical cash.
Investors often allocate surplus cash to cash-alternative solutions for a few main reasons, while being able to earn a respectable amount of interest in the meantime:
Provides ready access to cash for expenditure purposes.
Allows investors to quickly deploy capital within their investment account after market corrections or when a new investment opportunity emerges.
Can be an ideal source of funding to rebalance an investment portfolio (i.e. top-up exposure to stocks, bonds or funds) without needing to sell other assets, particularly under unfavourable conditions.
Among the most conservative investment options available and may provide investors some protection from down-trending markets.
Typically deliver higher interest income relative to savings/chequing account balances, as well as the opportunity for some tax-efficiency depending on the cash-alternative investment selected (i.e. discount bonds)*.
How do you determine the ideal cash-alternative investment? It will vary for each investor, but a prudent approach would be to consider what role the cash-alternative exposure will play in a portfolio and how soon it will need to be accessed. Generally speaking, if cash is needed sooner, it may dictate the need for more conservative solutions, such as ultra-short treasury bills. Typically, this would translate into both a shorter maturity profile and higher credit quality to help dampen volatility. Having their cash invested, but easily accessible, often provides investors with peace of mind knowing that the amount needed will be there when required.
Guardian Capital LP has several investment options available for investors looking to add or enhance cash-alternative exposure in their investment portfolio, none of which are locked-in or carry the redemption penalties associated with GICs.
Explore our investment fund lineup below to learn more and find the solution that might be right for you.
Ideal cash-alternative investment options for investors looking for near risk-free exposure, the Guardian Ultra-Short T-Bill Funds consist of 100% federally or provincially-backed Treasury Bills issued by the Canadian and U.S. governments, respectively.
Monthly distribution yields are generally expected to exceed the interest-earning potential of other short-term instruments like bank deposits, high interest savings accounts (and HISA ETFs) and cashable GICs.
Guardian Ultra-Short Canadian T-Bill Fund
Guardian Ultra-Short U.S. T-Bill Fund (USD)
GuardBonds™ is our suite of actively-managed, defined maturity bond funds, providing an ideal investment option for investors looking for short-term bond exposure with an explicit maturity date and the potential for tax-efficient income**.
These defined maturity date GuardBonds™ Funds allow investors to seamlessly align their investment exposure with their cash requirement needs and timelines. Choose a specific maturity year, or our set-it-and-forget-it 1-3 year bond ladder that automatically rebalances each year.
GuardBonds™ 1-3 Year Laddered Investment Grade Bond Fund
GuardBonds™ 2026 Investment Grade Bond Fund
GuardBonds™ 2027 Investment Grade Bond Fund
GuardBonds™ 2028 Investment Grade Bond Fund
GuardBonds™ 2029 Investment Grade Bond Fund
Guardian Short Duration Bond Fund is an actively managed bond fund that blends together short-term government and corporate bonds and could serve as an ideal solution for investors looking for a conservative solution seeking to deliver current interest income with a focus on capital preservation. Unlike our GuardBonds™ Funds, this Fund does not have a defined maturity date, meaning investors with a longer time-horizon may opt to remain invested in this Fund as a strategic weight in their overall portfolio.
Learn more*As at Monday February 2nd, updated weekly. Yield to Maturity (YTM) at Cost: The YTM (at Cost) shown is the weighted average Yield to Maturity at Cost of each of the underlying T-Bill or bond securities in the portfolio, net of cash. Yield to Maturity at Cost means the percentage rate of return paid if the T-Bill or bond security is held to its maturity date from the original time of purchase. The calculation is based on the coupon rate, length of time to maturity, and original price of the underlying T-Bill or bond securities.
YTM is a characteristic of the bond holdings in the portfolio. YTM represents the annualized expected rate of return earned on the bonds in the portfolio, and is based on the assumption that they are held to maturity and all coupon payments are made on time and reinvested at the same rate. Because bond fund returns are driven both by interest income and price movements, YTM is a more fulsome metric encapsulating both elements, as opposed to just showing the coupon yield of the underlying bonds in the portfolio.
YTM is not the yield, distribution rate or performance return of any Fund and is not intended to represent the distribution or return experience of any unit holder. It is only intended to give investors an idea a particular portfolio characteristic of the underlying securities held in the Fund’s portfolio.
Each Fund’s annualized distribution yields and cash distribution amounts are available on each Fund webpage, which can be found at: www.guardiancapital.com/investmentsolutions
**Tax-efficiency can potentially be achieved by investing in discount bonds (those bonds trading below their maturity value), which can result in a greater proportion of returns coming from tax-efficient capital gains relative to interest income. Each GuardBonds™ fund prioritizes holding bonds trading at a discount with the intention of holding them until maturity. When a discount bond matures at par value, the price appreciation is treated as a capital gain. The total return of a GuardBonds™ fund is expected to consist of bond interest income and capital gains. When a discount bond matures at par value the price appreciation is treated as a capital gain, which is taxed more favourably than interest income. Each GuardBonds™ fund prioritizes holding bonds trading at a discount with the intention of holding them until maturity. Tax efficiency is dependent upon the proportion of discount bonds held by a GuardBonds™ fund, which cannot be predicted and is expected to fluctuate over time, depending on prevailing market conditions as well as the impact and timing of subscriptions and redemptions. The total return of a GuardBonds™ fund is expected to consist of bond interest income and capital gains.
