Lyxor Smart Overnight Return GBP UCITS ETF (Acc.) - CSH2 - Share chat

Stock Discussions
61

It’s great to see some relatively long-standing and popular stock requests being added recently. :clap:

I am semi-tempted to build a position in one of the money market funds to give myself some liquidity, ready for when opportunities arise in future.

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62

The rate is flexible as it tracks SONIA which is around 5% If rates increase or stay this high for a year then you’re almost guaranteed SONIA less fees. If rates start to fall you can simply sell and invest in other assets.

A nice summary table at the bottom of this link on the differences between a retail savings account and a money market ETF

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63

Brilliant, thanks!

64

So would I be better with my deal woth BOS? Since I get 5.5% doesn’t seem to be a limit on how much you can put in just the catch with you have 10 days to do it and a minimum of 2k deposit

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The BOS fixed bond doesnt allow withdrawals as far as I understand.
You can get 5-6% on Ultra short sterling bonds at the moment with greater flexibility in accessing your cash in case you need it

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66

It depends on what you’re trying to achieve. If this is money you are happy to lock away for a year, then a retail bond is a good choice. You can do a bit better than 5.5% (eg 6% with Raisin), but the BOS rate is good.

The two main benefits of a money market fund like CSH2 are:

  • you can invest it within a restricted wrapper (like a SIPP or ISA)
  • the money can be accessed at any time if you want to switch your investment elsewhere

With either option, there is interest rate risk - if rates go up, the 5.5% fix looks less attractive, if rates go down, the CSH2 return will fall with them. Over the course of the next 12 months, I imagine they’ll be similar - but that’s just a guess.

Personally, I have my SIPP and ISA cash balances in CSH2, and my rainy day savings in Raisin 2-year fixed savings.

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67

Why do you not put your rainy day savings in CSH2 as well?

68

I’m simply expecting the raisin 2-year fix at 6% to outperform CSH2 over the same period. I think we’re close to a high in interest rates, and the CSH2 yield will fall with falling rates. I could, of course, be wrong :smiley:

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69

Hi there @EmilieG

Is CSH2 categorised as an Equity ETF?
This is incorrectly updating asset class percentage under “Insight”.
I was expecting “Bonds” allocation to go up, not “Stocks” after investing in this ETF.

Thanks

70

My understanding is that CSH2 uses swaps to track the current overnight lending rate, so technically it’s an equity, even though we expect it to behave more like a bond.

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@Geelling Technically an Equity ETF but this is still a Money Market ETF. I want it to be under Bond allocation in my portfolio.

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Categorisation for the insights tab could do with an overall, particularly for ETFs and trusts.

Apparently, I have 45% of my Isa and 33% of my Sipp in the finance sector. :man_shrugging:

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73

How will money market funds like CHS2 perform during a period of falling interest rates? Will the ETF just accumulate at a lower rate?

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Yes, it’s designed to track the overnight rate, so should follow any central bank interest rates

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75

Thanks, it seems as we can’t buy short term guilts that money market funds are the next best alternative.

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Hey
@EmilieG @acamp
Please could you provide an update on this [Moving CSH2 from Stock to Bond category]

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Hi @heather

Let us take a look at this classification and see what the most suitable change is here.

Best,
Alex

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78

Ahh sorry I never seen this responce. Is this with a guaranteed fixed rating? And yes I wouldn’t mind the money bring locked away as that’s money I wouldn’t touch anyway.

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I was always thinking we would be getting max two more rate hikes and it seems now others are thinking this as well, so that should see me at 6% ish and after that I’d assume the rates will fall even if there’s the Odd random last hike. I was thinking about doing the two year fix now.

Thanks for the information :slight_smile:

80

Hi, I’m exploring this etf. Is it likely that I could lose money on this? I want to leave some emergency cash sitting in a money market fund and thought this could be a good place as I already have funds in my ISA.

It looks like this fund only goes up and the variable is just the level of interest received from time to time. Correct?