Shares ISA - what to do with uninvested cash?

EdGasket

I have a self-select shares ISA primarily for direct investment in shares. However at times when I think shares in general might be heading for a drop (like now for instance), I sell some. That leaves 'cash' in the ISA which does not earn any interest and needing a safe home for a bit. The only ideas I've had so far as to what to do with this cash that is awaiting investment into shares again, is to put it into an Index-linked gilt fund, corporate bond fund, or Fixed-Interest Gilt fund. All of these can go down though probably not by as much as shares if the market turns sour. I have not found any straight 'cash' type fund which can be bought in the ISA.
Any other suggestions as to where to put cash for a bit? Also considering the so called 'Absolute Return' funds though I don't entirely trust them as they are derivative based; and wonder if they might end in the same way as split-caps did a few years ago. Any views on these?

Rollinghome

Unfortunately that's a big flaw with S&S ISAs that's unfair to smaller investors.

It resulted in a lot of them effectively locked into investments before last year's crash rather being able to move to cash and cost them dearly. (Arguably it also prevented a few from selling out at the bottom too.) It's proportionately much less of a problem if you also have substantial investments outside of an ISA that can be sold at will and so overly impacts on those with more moderate assets.

I think you're right to be wary of absolute return funds because they are so opaque but they did have a use last year as a way of losing ISA funds more slowly. You aren't allowed to put ISA funds into a straight cash or money-market fund. There were also some cautious managed/balanced funds that managed to hang on to assets while others lost them last year such those of CF Miton and Trojan that you might want to put on your list of options when you start feeling a touch bearish.

turbobob

Maybe a fund investing only in short dated investment grade bonds or gilts, if one exists? Only one I found exactly matching this criteria was iShares FTSE Gilts UK 0-5 Years which is an ETF (ticker code IGLS). They can be held in an ISA, unlike individual short dated gilts I believe. The trouble is, you have to pay dealing so it might not be cost effective for smaller amounts.

EdGasket

Thanks for the replies. The iShares, CF Miton, and Trojan fundS mentioned are not available to me with TD Waterhouse. I quickly checked if there were any funds with 'short' (dated) or '0-5' in their name but there aren't. Still good point, the shorter dated the better for safety; I'll have to do some more extensive research and see which gilt funds available to me hold the shortest dated gilts.

turbobob

The iShares fund probably is available to you through TD Waterhouse (I've bought iShares funds through them) however you buy it like a share and not through the fund supermarket. If you type the ticker IGLS into the quote box it should get you a price for it.