Government Liquidity Fund

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We have launched an innovative strategy for institutional investors looking to diversify their cash holdings beyond the banking sector. Our Government Liquidity Fund is a money market fund that incorporates security for investors in the form of UK government securities, and aims to both offer liquidity and provide a yield equivalent to prime money market funds.

The Government Liquidity Fund is unique. It conducts the majority of its reverse repo transactions with UK defined benefit pension funds, taking UK government debt as security against all cash investments. This means that the Fund is able to bypass the majority of dealing costs that are prevalent in the repo market. This structure aims to offer security to cash investors, without compromising on liquidity or yield relative to prime money market funds.

Security: all underlying repo transactions are secured against UK government securities, predominantly sourced from UK defined benefit pension schemes. All pension scheme counterparties must be eligible to enter a PPF assessment period in the event their corporate sponsor experiences financial difficulty

Liquidity: daily liquidity with overnight access (i.e. one day's notice required with 4pm cut off UK time)

Yield: in line with prime money market funds and with the objective of offering yields higher than those provided by government liquidity funds dealing exclusively with banks

Constant NAV structure: the Fund is a Public Debt Constant NAV (CNAV) short-term money market fund, as defined by the European Money Market Fund Regulations



GLF Fund table

Insight's investment team1

Our team comprises five dedicated money market and liquidity fund managers who manage pooled fund assets of £39.8bn on behalf of our clients. They have an average of 20 years' industry experience.

Our team also draws on our wider Fixed Income Group which employs over 116 investment professionals managing £147.4bn of fixed income assets. This group includes 45 credit research analysts and eight dedicated investment traders.

Government Liquidity Fund

  • £2.0bn Fund size
  • 34days Weighted average maturity
  • 34days Weighted average life

As at 31 August 2020.

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Important information

5-year performance table

  Calendar year returns   12-month rolling returns    
  2019 2018 2017 2016 2015   2019-2020  2018-2019  2017-2018 2016-2017 2015-2016 Currency Inception date
Government Liquidity Fund 0.81 0.61 0.32 -- --   0.65 0.77 0.41 0.36 -- GBP 09/03/2016
7-Day GBP LIBID 0.56 0.46 0.15 -- --   0.38 0.56 0.27 0.14 --    

Team statistics and assets under management (AUM) data shown as at 30 June 2020 and represented by the value of cash securities and other economic exposure managed for clients.

The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.

This is not a banking product and whilst preservation of capital is a major component of the objective it is not guaranteed. The value of capital invested in a money market fund may fluctuate. Neither Insight nor any other BNYM group company will provide capital support in the event of any capital loss, which will be borne by the investor.

Where the portfolio holds over 35% of its net asset value in securities of one governmental issuer, the value of the portfolio may be profoundly affected if one or more of these issuers fails to meet its obligations or suffers a ratings downgrade.

An investment in a money market fund is not a guaranteed investment and it is different to an investment in deposits as the principal invested is capable of fluctuation. The Fund does not rely on external support for guaranteeing its ability to sell its assets and/or meet redemptions (liquidity) or stabilising the fund’s price per unit/share (Net Asset Value). There is a risk of loss of the principal invested, which is borne by the investor.

Shareholders of the Fund and clients of the Investment Manager and Sub-Investment Manager may act directly as repo and reverse repo counterparties to the Fund. This may give rise to potential conflicts of interest.

Derivatives may be used to generate returns as well as to reduce costs and/or the overall risk of the portfolio. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.

Investments in bonds are affected by interest rates and inflation trends which may affect the value of the portfolio.

The investment manager may invest in instruments which can be difficult to sell when markets are stressed.

Portfolios which enter into repurchase and reverse repurchase agreements may be exposed to losses if the counterparty does not fulfil its obligations to the portfolio.

This Fund meets the definition of a covered fund under Volcker regulations.

Any losses in the fund will be borne solely by investors in the fund and not by BNY Mellon (including its affiliates); therefore BNY Mellon's losses in the fund will be limited to losses attributable to the ownership interests in the fund held by BNY Mellon and any affiliate in its capacity as an investor in the fund or as beneficiary of a restricted profit interest held by BNY Mellon or any affiliate.

Ownership interests in the fund are not insured by the FDIC, are not deposits, obligations of, or endorsed or guaranteed in any way, by BNY Mellon. Neither BNY Mellon nor any of its controlled affiliates (which includes the fund's general manager/ managing partner/ investment adviser), may directly or indirectly, guarantee, assume, or otherwise insure the obligations or performance of the fund or of any other covered fund in which the fund invests.

Investors should read the fund's offering documents before investing in the fund. Information about the role of BNY Mellon, its controlled affiliates, and their employees in sponsoring or providing services to the fund are described in the Volcker Rule section of the offering documents.