Money Market funds - Risks

masonic

raghav.raman said:

masonic said:

Risks are pretty minimal, but YTM on gilts are looking quite attractive and a rolling ladder could be worth a look. Both of these leave you with inflation risk, so index linked gilts could be worth considering too (obv short dated also).

I will be winding down my small holding of CSH2 as opportunities present further down the yield curve.

Thank you.
Are you able to point me to short dated index linked gilts?

I'm using the iShares Up To 10 Years Index Linked Gilts fund for some exposure, but it is also possible to buy these individually (although it usually involves placing the deal by phone). You can see individual options at https://www.yieldgimp.com/index-linked-gilt-yields

masonic

Ciprico said:

aroominyork said:

artyboy said:

That said, I've got a chunk invested in CSH2 and still consider it very low risk overall.

Me too, but since CGT increased from 10% to 18% its benefits over, say, the Royal London fund have narrowed.

Is CSH2 growth entirely capital gains...? I have tried to find out previously but couldn't find a decisive answer, so shied away from it in gia acct in favour for low coupon gilts...

No, the most recent report had some income included. There is no way of knowing in advance what the split will be.

ColdIron

Eyeful said:

Bond Ratings:

BB & downwards = Junk Bonds ( i.e. dodgy companies)

Dell, Ford and Mitsubishi, are BB, Tesla is B (by S&P)

Sure they could default but to characterise them as dodgy (or not a good company) is wide of the mark

Albermarle

artyboy said:

As CSH2 (Lyxor) was mentioned, bear in mind that it's a swap based synthetic STMM ETF (which also means no FSCS protection). So there are risk factors that the 'traditional' RL fund doesn't have.

That said, I've got a chunk invested in CSH2 and still consider it very low risk overall.

Maybe worth mentioning that some of the traditional insurers/workplace pension providers ( like Scottish Widows, Standard Life etc ) have their own STMM's. In theory at least 100% protected.