What's the most cash-like ISA fund?

chris1

What would be the most cash-like, least risky fund that could be put into a stocks and shares ISA?

tanith

A stocks and shares ISA would still fluctuate with the market anyway unlike a Cash ISA ... maybe someone else could come up with a suggestion...

Footsie_2

Depends on who your ISA is with and their selection of funds, usually the least risky and most cash like fund will be called a deposit fund but do check.

RayWolfe

Look up "Cash Funds"

Slim

Personal Assets Investment Trust, and
Ruffer Investment Company

cheerfulcat

The closest to cash eligible in a stocks and shares ISA would be gilts ( though only those with more than five years to run are allowed, and you need a self-select ISA to hold them ). More info on gilts here.

From various discussions elsewhere ( most of it summed up in an excellent thread on TMF ), it would seem that the only eligible cash/near cash fund is the M&G High Interest fund but there are some questions about the level of risk involved.

MrMicawber_2

Today's Telegraph looks at some 'low risk' funds - but these still have considerable exposure to equities. Are you totally equity adverse? If not some of these might be woth looking at. It mentions Invesco Perpetual Distribution*, Newton Phoenix Multi Asset (I'm not fully convinced by this fund but it seems well liked), M&G Cautious Multi Asset (no track record yet), Jupiter Merlin Income* (described as a true widows & orphans fund), Blackrock Merrill Lynch UK Alpha* (a full equity fund though), CF Midas Balanced Income*.

I'm not saying the others aren't, but the ones marked with an * seem to be liked by quite a lot of IFA's.

You might consider these too risky but suggest you look at the detail of each.

Gilts & UK Corporate Bonds would be less risky but lots of people think you are better off sticking with a normal savings cash ISA.

munk

I would recommend the Blackrock UK Absolute Alpha fund mentioned above by MrMicawber for a low risk equity fund. Over the past half year or so through the ridiculous market volatility this fund has somehow managed to lose very little ground - in fact the fund is up 6% over 6 months according to morningstar. At the same time the fund itself has been very low in volatility.

Unfortunately there is no risk data on morningstar for this fund since a fund has to be 3 years or older to qualify for their 3yr standard deviation listing. However if you look at the fund's chart on Bloomsberg with the 'rate of change' toggle on, you can see that the deviation/volatility is in the region of only 1% over the last 6 months which for my money is like holding a very low volatility corp bond fund but getting twice the performance out of it.

Ian_W

I'd endorse what munk says about the Blackrock fund but it is an equity fund. It's part invested in shares which are held long but then the manager places short positions against the same sector or index. If it goes up the shares gain value, if it goes down the short "bet" pays out. It can't be foolproof, if the market is fairly stagnant for a time you'd still be paying for the "bets" but not gaining on the shares - but it appears to work well in the present climate, so far so good anyway with low volitility and a reasonable return.
The OP might want to have a look at ABSOLUTE RETURN funds. The one I've highlighted, JPM CAUTIOUS TOTAL RETURN has 46% in cash/money market, the same in fixed interest - with around 8% in shares. It's never going to make a fortune in a booming market but again has low volitility because it's light on equities.
There are some articles on AR funds HERE but it's important to realise that different funds use different methods [like the two above] and returns aren't guaranteed. Depending on the sum involved you may be better using more than one fund to use differing methods.

Jonbvn

Several available:

Aberdeen Cash Fd A Acc
Fidelity Cash Fund Acc
Fidelity MoneyBuilder Cash ISA Fund Inc

cheerfulcat

But cash funds are not allowed in a stocks and shares ISA...