The fund, which was recently added to Cofunds, is currently worth £8bn and grew by 54 per cent last year.
Berens says: “It offers a good alternative to putting money with banks at a time when interest rates have been slashed to record lows while the fund is offering a yield of 1.75 per cent.”
Berens says it is important for advisers to recognise that not all liquidity funds should be pigeonholed. He says: “There is no tolerance for loss, hence the AAA rating from Standard & Poor’s. Compare that with the majority of liquidity funds in the UK, which tend to be A rated.”