Near cash: ETF or Fund within ISA?

olbas_oil

I have a large (50%) cash holding in my S&S ISA with IWeb. This is earning no interest. I'd like to keep it as 'near cash' but get some return. I read a discussion about someone recommending ETF's such as  XSTR as an alternative to a fund like L&G cash trust. I think the rationale was additional fees for holding funds. But I don't think that applies to IWeb. What are the other advantages/disadvantages? Are there any other options worth considering?

cloud_dog

@NedS mentioned CSH2 in the Vanguard thread.

NedS

There are ETFs like XSTR, CSH2, ERNS, JGST or a choice of OEIC money market funds. They all achieve a similar thing and are generally very low risk. Some take slightly more risk than others. If considering an ETF, you must also consider the bid/offer spread and dealing fees. Some prefer ETFs to funds as on some platforms the platform fees are capped when holding ETFs as opposed to funds. I also look at the size of the ETF/Fund.

The other main option is short dated government gilts if you are happy to hold to maturity, although the price may move around during the holding period, but if you hold to maturity that won't concern you as you know you will get the redemption price at maturity.

There is a thread here for cash-like alternatives:

https://forums.moneysavingexpert.com/discussion/6421073/where-to-hold-cash-in-a-sipp-or-s-s-isa