Cash-like fund for S&S ISA?

jamesd

Wboolydeb, I used the BlackRock UK Absolute Alpha fund for that last year and still have a little in it. Do note that it did fall a bit so it's not a one way guarantee. Also note that it and other unit trusts can still make interest or dividend distributions that need reporting to HMRC. Tax will normally already have been paid on them but a report is still needed so HMRC can say nothing to pay. Your broker should provide you with a report of the distributions in their end of tax year statement.

RayWolfe

The OP was talking about holding the "near cash" in a S&S ISA

Mikeyorks

There are some Absolute Return funds that don't carry a performance charge. And this is also one of the few that didn't go negative last year :-

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/n/newton-bny-mellon-real-return-class-a-income

The closest to cash are the Money Market funds :-

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/?companyid=&sectorid=123&tab=performance

..... but most have a current performance that can be bettered with real cash? And, for reasons I'm oblivious to, most can't be held in ISAs ..... at least not with Hargreaves Lansdowne.

tradetime

The nearest thing to cash, is cash, the only reason to put money into something else, it to increase the value, and as we know, rewards ultimately results in risk, so I'm not sure why the OP doesn't just leave it in cash. I realize that cash earns "diddly squat" but it also won't drop 10-15%

Aegis

Mikeyorks wrote: »

There are some Absolute Return funds that don't carry a performance charge. And this is also one of the few that didn't go negative last year :-

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/n/newton-bny-mellon-real-return-class-a-income

The closest to cash are the Money Market funds :-

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/?companyid=&sectorid=123&tab=performance

..... but most have a current performance that can be bettered with real cash? And, for reasons I'm oblivious to, most can't be held in ISAs ..... at least not with Hargreaves Lansdowne.

It's because money market funds are cash, and cash can't be held in a stocks and shares ISA (other than in preparation for an investment, in which case any interest is liable to a tax charge).

jamesd

Mikeyorks wrote: »

And this is also one of the few that didn't go negative last year :-

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/n/newton-bny-mellon-real-return-class-a-income

Are you sure that's the right fund? It was below initial value from January through August. Red is that Newton Real Return fund, blue the BlackRock UK Absolute Alpha fund.


UK money market funds are prohibited because they fail the 5% test. They can be held in a cash ISA, if you can find one that allows holding funds. HL used to allow this one until they found out about this guidance note:

"Qualifying investments – db x-trackers - Sterling Money Market ETF

We have been asked whether this ETF (Exchange Traded Fund) qualifies for cash ISAs or stocks and shares ISAs.

The company has made no guarantee that the investors capital is safe, however, in reality, it is highly unlikely that investors could ever lose money. The factsheet states that 'the ETF performance could be negative if the Sterling Overnight Index Average falls below the level of the All-In fee'. The All-In fee is db x-tracker’s management charge of 0.15 per cent per pa. So an investor would lose money only if the sterling overnight rate were to fall to 0.15 per cent or below (a highly unlikely eventuality).

Our view, therefore, is that investors could be certain (or near certain) of getting back 95 per cent or more of their initial investment. The fund therefore fails the 5 per cent test and is a qualifying investment for cash ISAs, not stocks and shares ISAs."

gozomark

RayWolfe wrote: »

I suspect that is the aim of all funds. Do you know of any that try to make a loss in certain circumstances? .

yes, any "relative to an index" fund will be delighted to only lose 10% if the benchmark falls say 15%

RayWolfe

The word I used was TRY.
Their level of DELIGHT completely eludes me.
However, you know what I meant ...

cloud_dog

Just for info........ If you're holding your S&S ISA within the CoFunds umberella they have a 'fund' called 'Cash Reserve' which is strictly a temporary home for cash until you re-invest

Porcupine

Most S&S ISAs providers allow you to hold money as cash. But interest is taxed, so it's no different to keeping it in a non-ISA account, and typically the interest rates aren't competitive. It's not terribly useful unless you plan to put it in other investments later.

I note the Cofunds account is fixed at 2% below base rate... I wonder if they're deducting 1.5%pa from balances now?

Another possible route to a relatively low risk investment is to use a structured product. But then you're usually locked in for around 5 years.