Got a credit card? use our Credit Card & Finance Calculators
Thanks to bruncher,niord,gvonge,Shelford,GrahamPlatt, for Donating to support the site
low risk investment instead of cash waiting for investment
-
- 2 Lemon pips
- Posts: 136
- Joined: November 10th, 2016, 11:19 am
- Has thanked: 47 times
- Been thanked: 26 times
low risk investment instead of cash waiting for investment
Hi,
I have been trying to find out if there is any money market investment that could pay around 1-2%(bank interest rate) with low risk and full liquidity.
Basically, I have a lot of cash waiting(for a long time) for a home in my SIPP and ISA(both with HL). I am not confident of any investment at the moment. So was wondering about it, really a instant savings account (may be a bit more risk than that) in a SIPP/ISA.
I would proabaly say no to funds as HL will take 0.45%. ETF/ IT / some other is fine. I have not been able to find something that is in GBP and holds GBP assets. There are some like https://www.lyxoretf.co.uk/en/instit/pr ... 136894/gbp , they hold USD assets, and I am not happy to buy USD using GBP at the moment.
Any ideas/recommendation.
Thanks in advance,
ap
I have been trying to find out if there is any money market investment that could pay around 1-2%(bank interest rate) with low risk and full liquidity.
Basically, I have a lot of cash waiting(for a long time) for a home in my SIPP and ISA(both with HL). I am not confident of any investment at the moment. So was wondering about it, really a instant savings account (may be a bit more risk than that) in a SIPP/ISA.
I would proabaly say no to funds as HL will take 0.45%. ETF/ IT / some other is fine. I have not been able to find something that is in GBP and holds GBP assets. There are some like https://www.lyxoretf.co.uk/en/instit/pr ... 136894/gbp , they hold USD assets, and I am not happy to buy USD using GBP at the moment.
Any ideas/recommendation.
Thanks in advance,
ap
-
- Lemon Quarter
- Posts: 3544
- Joined: November 19th, 2016, 2:02 pm
- Has thanked: 1209 times
- Been thanked: 1296 times
Re: low risk investment instead of cash waiting for investment
colin wrote:Ishares FLOS
Colin, FLOS holds, or should I say tracks, Dollar denominated floating rate bonds, albeit hedged back to and quoted in sterling.
https://www.justetf.com/uk/etf-profile. ... 00BF7TPM11
The OP wanted to avoid buying dollar assets currently.
air04 wrote:I would proabaly say no to funds as HL will take 0.45%. ETF/ IT / some other is fine. I have not been able to find something that is in GBP and holds GBP assets. There are some like https://www.lyxoretf.co.uk/en/instit/pr ... 136894/gbp , they hold USD assets, and I am not happy to buy USD using GBP at the moment.
-
- 2 Lemon pips
- Posts: 136
- Joined: November 10th, 2016, 11:19 am
- Has thanked: 47 times
- Been thanked: 26 times
Re: low risk investment instead of cash waiting for investment
Thanks All.
I am ok with USD hedged. The reason I was not for USD ones is that I did not want the currency fluctuations with the brexit in place. It went from 1.5 to 1.2+, and I do not want a large loss IF it goes the other way.
I am ok with USD hedged. The reason I was not for USD ones is that I did not want the currency fluctuations with the brexit in place. It went from 1.5 to 1.2+, and I do not want a large loss IF it goes the other way.
-
- Lemon Slice
- Posts: 487
- Joined: November 6th, 2016, 12:24 pm
- Has thanked: 2 times
- Been thanked: 564 times
Re: low risk investment instead of cash waiting for investment
air04 - I too have an excess of cash in my SIPP, so in light of Balfour Beatty's (BBY) excellent Trading Update on Friday, decided to add to my existing holding in BBYB, the 10.75% CULS maturing Jul'20 - now less than 19 months away.
Buying at 107.95p means 108.54p inc. expenses. At that level the Gross Redemption Yield = 4.46%pa. Not a great return; but in these uncertain times...
See the BBYB thread here:
viewtopic.php?f=52&t=14468&p=187247#p187247
Buying at 107.95p means 108.54p inc. expenses. At that level the Gross Redemption Yield = 4.46%pa. Not a great return; but in these uncertain times...
See the BBYB thread here:
viewtopic.php?f=52&t=14468&p=187247#p187247
-
- Lemon Half
- Posts: 9129
- Joined: November 4th, 2016, 1:16 pm
- Has thanked: 4140 times
- Been thanked: 10032 times
Re: low risk investment instead of cash waiting for investment
SKYSHIP wrote:
air04 - I too have an excess of cash in my SIPP, so in light of Balfour Beatty's (BBY) excellent Trading Update on Friday, decided to add to my existing holding in BBYB, the 10.75% CULS maturing Jul'20 - now less than 19 months away.
Buying at 107.95p means 108.54p inc. expenses. At that level the Gross Redemption Yield = 4.46%pa. Not a great return; but in these uncertain times...
See the BBYB thread here:
viewtopic.php?f=52&t=14468&p=187247#p187247
Single-company risk as a suggestion for a 'low risk investment instead of cash'?
Not too sure at all about that....especially when we can still hear the Carillion stories echoing around....
Cheers,
Itsallaguess
-
- Lemon Slice
- Posts: 494
- Joined: November 4th, 2016, 2:24 pm
- Has thanked: 2 times
- Been thanked: 98 times
Re: low risk investment instead of cash waiting for investment
colin wrote:ishares ERNS
Better off keeping cash under the mattress.
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: low risk investment instead of cash waiting for investment
toofast2live wrote:colin wrote:ishares ERNS
Better off keeping cash under the mattress.
Why ?
Genuine question - I have the same problem, a large dollop of cash sitting in my ISA doing nowt. I was looking at ERNS as a potential home, but still don't understand the risks - i.e. is there a risk of permanent capital loss if interest rates rise?
From memory the yield was about 0.8%, which beats most mattresses but lags decent savings accounts
-
- Lemon Slice
- Posts: 663
- Joined: December 10th, 2016, 7:16 pm
- Has thanked: 24 times
- Been thanked: 114 times
Re: low risk investment instead of cash waiting for investment
- i.e. is there a risk of permanent capital loss if interest rates rise?
No not permanent,most of the bonds will roll over within a year reflecting the new interest rate, and because it's so short term when interest rates look like rising losses should be a fraction of a percent, problem is expected returns are barely more than the charge so unless you have a good reason for not wanting to hold cash I do not see the point.
-
- Lemon Slice
- Posts: 494
- Joined: November 4th, 2016, 2:24 pm
- Has thanked: 2 times
- Been thanked: 98 times
Re: low risk investment instead of cash waiting for investment
AleisterCrowley wrote:toofast2live wrote:colin wrote:ishares ERNS
Better off keeping cash under the mattress.
Why ?
Genuine question - I have the same problem, a large dollop of cash sitting in my ISA doing nowt. I was looking at ERNS as a potential home, but still don't understand the risks - i.e. is there a risk of permanent capital loss if interest rates rise?
From memory the yield was about 0.8%, which beats most mattresses but lags decent savings accounts
ENRS has a negative return over many time periods, last time I looked.
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: low risk investment instead of cash waiting for investment
https://www.ishares.com/uk/individual/e ... ugh=true#/
Not the way I read it ? Looks like TR in the range 0.6-0.9%
Not the way I read it ? Looks like TR in the range 0.6-0.9%
-
- The full Lemon
- Posts: 19137
- Joined: November 4th, 2016, 3:58 pm
- Has thanked: 646 times
- Been thanked: 6793 times
Re: low risk investment instead of cash waiting for investment
toofast2live wrote:colin wrote:ishares ERNS
Better off keeping cash under the mattress.
For access and anonymity, perhaps. But ERNS is effectively a money market fund in ETF form, and seems unlikely to lose value in the way that a long-dated bond fund can. Again, credit risk is minimal. Interest rate is less than 1%, but would rise in a rising rate environment.
The one issue is that the income might be deemed to be dividends rather than interest, and that might have a tax consequence for some investors.
-
- 2 Lemon pips
- Posts: 136
- Joined: November 10th, 2016, 11:19 am
- Has thanked: 47 times
- Been thanked: 26 times
Re: low risk investment instead of cash waiting for investment
Thanks a lot to all. I really appreciate your views.
FLOS, I looked at the returns, they were very low, probably hedging has a cost.
I have more than enough of BBYB, bought before the current dividend.
I went for ERNS, and bought it in all ISA/SIPP account.
Cheers,
FLOS, I looked at the returns, they were very low, probably hedging has a cost.
I have more than enough of BBYB, bought before the current dividend.
I went for ERNS, and bought it in all ISA/SIPP account.
Cheers,
-
- Lemon Quarter
- Posts: 3521
- Joined: November 5th, 2016, 8:43 am
- Has thanked: 3913 times
- Been thanked: 1431 times
Re: low risk investment instead of cash waiting for investment
AleisterCrowley wrote:https://www.ishares.com/uk/individual/en/products/258120/ishares-ultrashort-bond-ucits-etf?switchLocale=y&siteEntryPassthrough=true#/
Not the way I read it ? Looks like TR in the range 0.6-0.9%
I'd never heard of this one before, but just had a quick look at:
https://www.ii.co.uk/etfs/ishares-ultra ... t/LSE:ERNS
The pattern over 5 years is remarkable, up and down like a yo-yo every 6 months. Now looks like a good time to buy.
Though now I've said that, the pattern is bound to change completely!
Steve
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: low risk investment instead of cash waiting for investment
Odd that, isn't it? Almost like something's happening every June and December, mid-month
-
- 2 Lemon pips
- Posts: 136
- Joined: November 10th, 2016, 11:19 am
- Has thanked: 47 times
- Been thanked: 26 times
Re: low risk investment instead of cash waiting for investment
my understanding is that when dividend is paid, the price reduces by the dividend amount. And until then, dividend slowly accrues.
-
- Lemon Half
- Posts: 6385
- Joined: November 4th, 2016, 11:35 am
- Has thanked: 1882 times
- Been thanked: 2026 times
Re: low risk investment instead of cash waiting for investment
Distribution dates and amounts listed on the left in 'Performance' section of link I posted
https://www.ishares.com/uk/individual/e ... ugh=true#/
Distributions
Record Date Ex-Date Total Distribution
14/Dec/2018 13/Dec/2018 GBP 0.4013
15/Jun/2018 14/Jun/2018 GBP 0.3384
15/Dec/2017 14/Dec/2017 GBP 0.2311
16/Jun/2017 15/Jun/2017 GBP 0.2876
https://www.ishares.com/uk/individual/e ... ugh=true#/
Distributions
Record Date Ex-Date Total Distribution
14/Dec/2018 13/Dec/2018 GBP 0.4013
15/Jun/2018 14/Jun/2018 GBP 0.3384
15/Dec/2017 14/Dec/2017 GBP 0.2311
16/Jun/2017 15/Jun/2017 GBP 0.2876
-
- Lemon Quarter
- Posts: 3521
- Joined: November 5th, 2016, 8:43 am
- Has thanked: 3913 times
- Been thanked: 1431 times
Re: low risk investment instead of cash waiting for investment
AleisterCrowley wrote:Odd that, isn't it? Almost like something's happening every June and December, mid-month
Ah, yes, I see what you mean. Obviously I was having a Homer Simpson moment there.
Though in my defence, I've never bothered with ex-div and payment dates before.
Steve
-
- Lemon Slice
- Posts: 663
- Joined: December 10th, 2016, 7:16 pm
- Has thanked: 24 times
- Been thanked: 114 times
Re: low risk investment instead of cash waiting for investment
FLOS, I looked at the returns, they were very low, probably hedging has a cost.
The distributions from FLOS are linked to the US dollar Libor rate, the historical return published does not tell you much about future returns because the Libor rate was lower a year ago than it is now , as US interest rates rise I expect Libor to rise too.
Who is online
Users browsing this forum: No registered users and 5 guests