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CSH2 Money Market ETF
I am quite an experienced long term investor with a portfolio of investments built over the years.
My wife has a transfer of funds held in a SIPP awaiting investment decisions and is age 66.
The funds are currently earning a v low interest rate in the SIPP account.
We have been reluctant to invest further at the current time. I have read about a CSH2 fund which is like a money market ETF and I understand grows at around up to 4% currently a year pending any other investment decisions we may make.
Is this is a safe fund and does this short term strategy make sense?
Comments
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It's a bit more complicated/synthetic than a MMF ETF, but if you need an ETF structure (as opposed to simply using a MMF) it's still the closest to it, albeit formally benchmarking the Euro short term rate rather than the Bank of England SONIA that MMFs in the UK tend to track.
If you're looking for a short term place to store money then sure - it's not as safe/liquid as cash, but it's not far off.
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^ Would similar comments apply to eg. QUID?
N. Hampshire, he/him. Octopus Intelligent Go elec / Fuse gas / Vodafone BB / iD mobile. Kirk Hill Co-op member.Economy 7 cap explainer. Gas vs E7 vs peak elec heating costs, Ecoflow Stream, Best kettle :-)
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No, that's not a MMF nor is it synthentic.
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The relevant sub-fund still enters into a swap for the return of SONIA. It has just become even more complex under the hood following its restructure.
OP, there are slightly better prospects in "mixed" MMF if you are not wedded to an ETF.
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As I understand it, GONS is similar to CSH2 but benchmarks against the BoE SONIA rather than euro.
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Hmm, just £6m in size so far, but it's being going for less than a year. I find it a little off-putting that it seems to re-value just once every 2 weeks. If you need to sell the day before, you miss out on 13 days return. But the share price makes it a lot less lumpy to buy.
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Would be interested to know? Was attracted by ETF as no additional charges for holiding.
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where does it state a 2 week revaluation ?
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There are funds like Royal London Short Term Fixed Income Enhanced, which contain a mix of cash, short dated government and corporate bonds, which is a bit further up the risk ladder than a pure MMF, but targets 1% above SONIA. But, there is obviously a fund fee and if you also pay a platform fee, that could swallow up quite a bit of the extra returns.
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