The new ETF enables investors to use rising rates to their advantage. 

Canadian fund manager Purpose Investments Inc has launched the Purpose Cash Management Fund on the Toronto Stock Exchange. The yields on the fund investments are expected to rise in tandem with the rate hikes to be implemented by the Bank of Canada in its effort to tame inflation. (GlobeNewswire)

The new ETF will take advantage of rising cash allocations from investors wary of risk and volatility in the bond and equity markets.

Purpose Cash Management Fund

The primary objectives of the fund are principal stabilty and attractive yields. As on September 14, the fund anticipated a net yield of about 3.30%.

It will invest in Canadian-dollar cash and short-term, high-quality money market instruments to ensure high levels of liquidity, capital preservation, and attractive yields without undue risk.

The ETF will be actively managed to take advantage of changing market environments.

Fundspeak

“We’re in a very challenging market environment this year, and with interest rates moving higher, we wanted to offer investors a new way to manage their cash and maximize their yield,” says Greg Taylor, Chief Investment Officer at Purpose.

“Investing in non-yield optimized cash options or allocating your money in longer-term deposits can be detrimental to your portfolio when inflation is rising faster than your returns,” says Vlad Tasevski, Chief Operating Officer and Head of Product. “With the Purpose Cash Management Fund, we aim to provide investors with a way to capitalize off rising interest rates while maintaining daily liquidity. Given that the markets have been so volatile, the Fund will provide investors with a safe and attractive yield option for their cash balances.”

Related Story: Purpose Launches Global Equity ETF With ESG Focus