Cash in a stocks & shares ISA

[Nocton]

With the prospect of a sharp fall in the markets, it seems a good idea to sell some ITs and ETFs within my ISA. But what can one do with the cash? With bonds even more likely to fall with rising interest rates, I should like to invest the cash to generate some income, while remaining in the ISA. Does anyone know if there a "cash IT" or similar that one could use for this? Or are there any other suggestions to preserve the cash and yield some income?

[Alaric]

Does anyone know if there a "cash IT" or similar that one could use for this? Or are there any other suggestions to preserve the cash and yield some income?

More often than not, you are compelled to accept the 0.01% offered by the ISA manager. There's the option of near cash ETFs, short bonds or their higher risk equivalents in corporate bonds. It doesn't guarantee no losses though.

Until George Osborne pulled the plug, undated Gilts used to be an interesting option. You would get the coupon and the fact that these were up to 4%, higher than dated Gilts would send the price over par. It wouldn't go very far over par as the prospect of repayment at the borrower's option anchored the price back to par.

At the cost of some risk and having to fish in some murky waters, the same trick might be available with undated PIBS and Preference Shares.

Under Investment Trusts, the Sector "Liquidity Funds" has a couple of names.

There's Invesco Perp Select Liquidity Ord (IVPM) whose price has been stuck at 102 for about 6 months.

Also there's JPMorgan Elect Managed Cash Ord (JPEC) whose price is stuck at 100.5

The Invesco fund doesn't quote a yield (perhaps it's zero because of charges), whilst the Morgan one quotes 0.35%

For a (much) higher risk, there are a number of funds under the "Debt" Sector. These invest in loans.

[AleisterCrowley]

... But what can one do with the cash? With bonds even more likely to fall with rising interest rates, I should like to invest the cash to generate some income, while remaining in the ISA.

I asked a similar question about a year ago;
viewtopic.php?f=8&t=3595
Similar subject here;
viewtopic.php?f=8&t=6119
ERNS crops up;
https://www.ishares.com/uk/individual/e ... -ucits-etf
Not a great return though

[AleisterCrowley]

Just some additional info - RateSetter are rolling out an IFISA this month.
I haven't researched it yet but I assume one can run an IFISA in addition to a cash and equities ISA if the total is <=£20k subs in a year
Not sure if transfers in are allowed, or if it would be feasible to run an IFISA as a cash float for an equities ISA. The time taken to transfer between may be an issue, and they may have limits

[Nocton]

Thanks for the replies. Nothing looks terribly interesting when one sets the potential yield against the switching costs and the chance, in some cases, of a loss in value. Re the Ratesetter ISA idea, I have a substantial holding in Ratesetter, both Rolling and 5-year, and would be happy to move cash there, but I as that will effectively be a cash ISA I don't think one can move it in from a stocks & shares ISA. Looks as if I shall just sit on a pile of cash for a while if I want to protect against a fall in the market. In the past I have taken out a 'short' ETF, but although it worked the gain was relatively small for the effort required to monitor the market closely in case it turns up, when one can lose quite a bit quite quickly.

[jackdaww]

interesting , thanks.

[toofast2live]

You can transfer from a stocks and share isa to a IFISA, which is what RS offer.

[AleisterCrowley]

Re:IFISA Ratesetter- There's the delay in the other direction to consider, should you wish to refinance the equities ISA if/when the market turns

None of the options are going to provide much of a return.

I understand that under the new rules one can actually withdraw cash from a 'flexible' ISA (including equities ISAs??) and replace without losing the tax shelter - has to be within a financial year I think. Obviously something to check first, but would make 'high interest' current accounts an option

I'm probably going with ERNS - better to get 0.6%, or whatever it is, than nothing