Discussion
Hello
Is there such a thing as a GBP cash ETF which pays interest after fees?
So basically you could buy the ETF and it would pay the interest credited per month or something like that. Anything better than zero. Basically so it mimics a cash savings account without having to transfer out etc.
Thanks
Mike
Is there such a thing as a GBP cash ETF which pays interest after fees?
So basically you could buy the ETF and it would pay the interest credited per month or something like that. Anything better than zero. Basically so it mimics a cash savings account without having to transfer out etc.
Thanks
Mike
Edited by bmwmike on Thursday 1st December 15:43
I’d be interested if there is. I’m currently planning on taking the tax free lump sum out of my sipp in September next year and so have 25% I don’t want to take much risk with. Currently in the M&G short dated corporate bond fund as the best interest paying cash proxy I can find. Very open to finding something better though……
williaa68 said:
I’d be interested if there is. I’m currently planning on taking the tax free lump sum out of my sipp in September next year and so have 25% I don’t want to take much risk with. Currently in the M&G short dated corporate bond fund as the best interest paying cash proxy I can find. Very open to finding something better though……
I wouldn't say that corporate bonds (short dated or otherwise) are a proxy for cash. A short-dated gilt fund would be closer, or a money market fund as I mentioned above.
b
hstewie said:
hstewie said: What are you actually trying to do?
You can get about 2.7% after fees on cash held in a Vanguard S&S ISA which seems kind of nuts.
HSBC Premier S&S ISA pays zero, and AJBELL (SIPP) pays zero on cash too (if the interest is under £2.50. So whilst I could transfer the HSBC ISA to Vanguard its a pain to do so, and it'd be great to just buy a ETF to cover that. I guess if there is nothing, i need to transfer it. You can get about 2.7% after fees on cash held in a Vanguard S&S ISA which seems kind of nuts.
Is it such a crazy requirement though?
Also where do you get 2.7% for vanguard btw, last I checked with them, i'm not getting anywhere near that on cash. Also why is it nuts?
bmwmike said:
HSBC Premier S&S ISA pays zero, and AJBELL (SIPP) pays zero on cash too (if the interest is under £2.50. So whilst I could transfer the HSBC ISA to Vanguard its a pain to do so, and it'd be great to just buy a ETF to cover that. I guess if there is nothing, i need to transfer it.
Is it such a crazy requirement though?
Also where do you get 2.7% for vanguard btw, last I checked with them, i'm not getting anywhere near that on cash. Also why is it nuts?
I don't know any other S&S platform where you can get 2.7% (it may be a little more or less) on cash you park in there whilst you're waiting to invest it so it seems incredibly good for no effort (if you already have a Vanguard account Is it such a crazy requirement though?
Also where do you get 2.7% for vanguard btw, last I checked with them, i'm not getting anywhere near that on cash. Also why is it nuts?
).bhstewie said:
hstewie said: I don't know any other S&S platform where you can get 2.7% (it may be a little more or less) on cash you park in there whilst you're waiting to invest it so it seems incredibly good for no effort (if you already have a Vanguard account ).
Agree its good, but how do you know what the rate is - got a link?).Also it means transferring, which i didn't want to do.
bmwmike said:
Agree its good, but how do you know what the rate is - got a link?
Also it means transferring, which i didn't want to do.
Annoyingly they don't publish it you have to ask them (I do this via private message) but I believe it's BOE base rate less 0.2% less platform fees.Also it means transferring, which i didn't want to do.
I think Vanguard Sterling Short-Term Money Market Fund is the closest to cash fund Vanguard offer.
iShares £ Ultrashort Bond UCITS ETF ticker ERNS has been about the only bond etf to not give a negative total return for 2022 so far, looking forward it currently has a Weighted Average YTM of 3.75%.
If we are talking ISAs here then you may as well move to a 1 year fix Cash ISA instead, but as some have mentioned if you are holding within a pension wrapper such ETFs can have a place in allocating to cover your 25% tax free lump sum as you get closer to the date.
If your time horizon is longer than a year then iShares IGLS for gilts and IS15 for Corporate Bonds are maybe worth a look. Both are a blend of 0-5 year maturity. But IGLS yields less than ERNS despite slightly higher volatilty and loss potential.
I like IS15 as it has a Weighted Average YTM of 5.5% so is not a terrible place to store for the medium term. It is not a bad risk-adjusted return compared to equities, especially considering we are unlikely to get another year as terrible as 2022 for bonds.
If we are talking ISAs here then you may as well move to a 1 year fix Cash ISA instead, but as some have mentioned if you are holding within a pension wrapper such ETFs can have a place in allocating to cover your 25% tax free lump sum as you get closer to the date.
If your time horizon is longer than a year then iShares IGLS for gilts and IS15 for Corporate Bonds are maybe worth a look. Both are a blend of 0-5 year maturity. But IGLS yields less than ERNS despite slightly higher volatilty and loss potential.
I like IS15 as it has a Weighted Average YTM of 5.5% so is not a terrible place to store for the medium term. It is not a bad risk-adjusted return compared to equities, especially considering we are unlikely to get another year as terrible as 2022 for bonds.
Edited by WayOutWest on Monday 5th December 11:14
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