CSH2: taxation and performance

aroominyork

Thank you. So could you say CSH2’s slight outperformance compared to RL STMMF could be down to three factors: holding slightly risker assets, better asset selection, synthetic risks? And would different people take different views about the balance of those factors, or is it quite clear where the reason for the outperformance lies. Also, can you explain why CSH2’s price has been a less straight line (more daily variation) over the last six or so months?

masonic

CSH2 is synthetic, so the performance of the actual underlying assets is irrelevant unless they perform so badly the counterparty is put at risk. Otherwise the returns are defined by contract. Fluctuations will be due to the ETF trading above and below NAV. The underlying reasons for that are a matter of speculation, as is always the case for market valuations of an asset, but one possible reason could be that the fund has been seeing days with net outflows now there are opportunities elsewhere in the bond market. Perhaps the merger will make this less noticeable.

MiserlyMartin

Not another Amundi ETF merger. I am getting fed up of these. I had a prime global ETF which is now merged into a fund called MWOZ which is not tradable, and might even be outside my Freetrade SIPP tax wrapper. Freetrade have been absolutely no help whatsoever about it, and did not give notice about the merger so I could have decided to sell it. I will post on the pension board, but they imply that they won't even transfer it even if I were to transfer my SIPP out! This is now making me wary about csh2 and I have a lot of it!

cloud_dog

They took over / bought out Lyxor last year (I think, might have been 2023), so I assume it is the consolidation of mirrored funds.

masonic

It's been going on since 2022: https://about.amundi.com/article/effective-merger-lyxor-entities-amundi-france

artyboy

aroominyork said:

Lyxor were absorbed into Amundi two days ago. HL and ii both still show Lyxor - I guess they'll update the name sometime. But am I right in thinking it doesn't/won't change the unit price?

CSH2 merging into an Amundi ETF as of 7 March - not yet looked at it, but I'm guessing its an equivalent synthetic STMM type product?

https://www.webdisclosure.com/article/amundi-etfs-announce-upcoming-mergers-ssCScYbrtcv

Although I'm curious about how it would transfer if you were holding it in an ISA and the pricing was different - as you can't (I believe) have fractional units in an ISA - could end up with a bit of residual cash after the 7th March...

wmb194

artyboy said:

aroominyork said:

Lyxor were absorbed into Amundi two days ago. HL and ii both still show Lyxor - I guess they'll update the name sometime. But am I right in thinking it doesn't/won't change the unit price?

CSH2 merging into an Amundi ETF as of 7 March - not yet looked at it, but I'm guessing its an equivalent synthetic STMM type product?

https://www.webdisclosure.com/article/amundi-etfs-announce-upcoming-mergers-ssCScYbrtcv

Although I'm curious about how it would transfer if you were holding it in an ISA and the pricing was different - as you can't (I believe) have fractional units in an ISA - could end up with a bit of residual cash after the 7th March...

You can have fractional units in an Isa, the intention to allow it at least was stated by the government and HMRC said it wasn’t going to pursue the providers that offer/did offer fractional shares in an Isa. Freetrade was scared away but T212 never stopped and still offers fractional shares in S&S Isas.

masonic

Most providers don't support fractional. I suppose any remainder could be spat out as cash by some mechanism. Though the share price of CSH2 is very high, so hopefully each share can be split into an even number of new shares.

Reading up on this is on my weekend to-do list.

aroominyork

masonic said:

Most providers don't support fractional.

This can move to a new thread if people want to discuss it, but Interactive Investor sells (online) part-units of nominal gilts but only lets you sell whole units. The remaining fraction sits in your account and, on maturity, you receive a few pence.

MiserlyMartin

A message on Freetrade today informs us that the merger will happen on the 10th of March and you will get 1 share of the new for the old. They then come out with generic blurb about what happens when funds merge etc. But nothing specific to this one. Ie, will the new one be offered on the platform??, they do not make that clear, instead keep on about what happens when some funds are not and it is sold into cash. It's frustrating that they don't make their comms relevant to your fund. The new one will be listed on the LSE from what I read elsewhere, so I presume that FT will be trading that. But we shouldn't have to guess or presume, they should properly tell us