The Lemon Fool

Hi all
Due to a change in personal circumstances I have a fairly large cash balance in my equities ISA- which is earning 0% unless HSDL have started paying interest again
What's the current 'go to' low risk cash-like investment?
ERNS was quite popular a year or so back, but interest rates have ticked up considerably

I do have a few prefs - what does the market look like currently?
My Lloyds LLPE 6.475% Non-Cum Irrd Prefs seem to be trading around par, which looks too good to be true, so presumably there's a catch (banking contagion? Dividends at risk of suspension?)

I watched a bit of a Ramin Nakisa (Pension Craft) vid about bond ladders, which I'll have to find again, and he did mention some Gilts were paying a reasonable amount currently. HSDL make buying Gilts a bit tedious, it can't be done online

Is there still a website that lays out all the options for fixed income? From memory there was a UK one run by (??) Mark Glowery, but I think it folded

AleisterCrowley wrote:What's the current 'go to' low risk cash-like investment?

I hold some fixed interest with specific expiry dates for a planned need for cash. As I know coupon and date I know what my return will be. Other than that for cash like in an ISA/SIPP I hold cash.

I hold some fixed interest with specific expiry dates for a planned need for cash

Gilts then, or what?
What rate are you getting, over what term?
What rate do you get on the cash you hold?

When I said Cash-like, I should have perhaps said 'low risk, and easily accessible'
I'd accept a risk of ~1% loss if I was a forced seller for some reason (alimony, drug debts)

AleisterCrowley wrote:What rate are you getting, over what term?

I bought International Personal Finance bonds IPF2 for around par with expiry of Dec 2023 and 7.75% coupon. I also hold Regional REIT bonds RGL1 4.5% coupon, maturity 2024 bought 2020 and 2021 averaging around 90p.
I hold a Lloyds perf too LLPC but that's been in there since 2015.

I'm assuming those are both fairly risky, and thus unsuitable for my needs ???
I'm looking for stuff around 1-3 on the risk scale (as seen on key investor info docs)
I'll prob do a pyramid with smaller amounts of higher risk stuff near the top
I could, of course , transfer to a cash ISA, but running out of options as I'm near the FSCS limit with Shawbrook/Paragon

Anyway, must head to Newbury, as they have some beer that needs drinking
Good weekend all
AC

AleisterCrowley wrote:Anyway, must head to Newbury, as they have some beer that needs drinking
Good weekend all

Those gee-gees are hardly a safe investment

AleisterCrowley wrote:What's the current 'go to' low risk cash-like investment?

IPF3 2027 is available around par, pays 12% so may not be exactly 'low risk' but when you come to sell the spread is very small.

Short-term, Vanquis 5.125% 66WS matures 9/10/23 and is available just under par.

NTEA Northern Electric pref yielding around 6.6%, but wider spread.

RSAB 7.375% Pref just above par, again bit of a spread.

LLPE sits around par because it calls next year, so if you can buy at par that's another good short-term bolthole.

V8

Low risk cash type would be ERNS or a similar ETF.

Or a short dated gilt. say TN24 or TN25.

money market funds seem to be for this purpose. i don't know much about them myself but here's a financial advisor talking about them on youtube...
https://youtu.be/AYmcGJOa3eY?t=320

I would second IPF2 and 66WS for the short term. Both firms have the ability to redeem without further bond issuance. Catastrophe could strike either of course, so if you want a guarantee go for TN24. FWIW I hold all 3.

When buying in small amounts make sure you have costed everything in before purchase so you know precisely what gain you are getting. With short term stuff it is all too easy for the spread, commission and accrued interest to swamp the profit. ERNS and CSH2 good cash alternatives as well. Again watch out for spread and dealing costs.

there is: Royal London Short Term Money Market Class Y - Accumulation (GBP)
https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/r/royal-london-short-term-money-market-class-y-accumulation

Seems to be tracking SONIA pretty closely, less 0.1% TER
https://www.bankofengland.co.uk/boeapps/database/fromshowcolumns.asp?FD=1&FM=Jan&FY=2023&TD=31&TM=Dec&TY=2025&html.x=66&html.y=26&SeriesCodes=IUDSOIA&UsingCodes=Y

SONIA currently about 0.1% below BoE rate, which is expected to go up to 4.5% this week according to FT. So Royal London maybe will make you about 4.3%pa if that increase does go ahead

gpadsa

A belated thanks for the responses.

I'm looking at the Money Market funds available in my AJBell SIPP and have a few questions - I'll start a new post