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

Yes, that’s basically correct. The ETF will track the Bank of England base rate very closely, so depending on what your rate expectations and access to cash needs are, this or a high-rate fixed rate savings account are your best bets just now. This fund is particularly useful for funds that can’t easily be turned into cash, such as pension funds, as normal savings products aren’t available for them.

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If it’s emergency cash and not going to be invested I would consider just taking it out the ISA and putting it into a high interest savings account at 5%.

Yeah, in an emergency, you’d wait days to withdraw from a money market ETF, so I’d favour a savings account as it’s more or less instant access.

This has suddenly become tagged as highly volatile and therefore considered high risk, asking me to complete a range of financial questions before I can buy more?

Surely this is an error? How can this be considered volatile and high risk?

I suspect it’s because the fund uses derivatives to achieve its low-volatility outcome, and that anything using derivatives gets tagged as high risk

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It shouldn’t say anything about volatility or high risk, @ndm. If you’ve got a screenshot where it says that please share as this would be an error.

As @Geelling mentioned, the instrument has been flagged as complex during our product governance checks. In this case the complexity is because of the fact that the fund seeks to replicate an overnight rate through the use of total return swaps.

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Hi @acamp
Thanks for the feedback. It was showing as high risk yesterday when I wrote this (see screenshot )but I can see that it’s now been amended to state that it’s complex.

Ok I was just about to say that wording is not the most recent and was worried your app hadn’t updated properly. Thanks for confirming!

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Why do I have to answer questions on leveraged ETFs and dividend policy of investment trusts to invest in CSH2? Questions have no relevance to that product at all and seems very nanny state to prevent buy orders on this product. No other provider is limiting orders behind a ridiculous quiz like this

I see where you’re coming from but it would be difficult for FT to tailor the suitability questionnaire to each and every security.

In fairness, much of this is out of FT’s hands as it’s due to FCA/EU regulations.

As I understand it: if an instrument uses derivatives, a complexity check should be in place.

You’re right that there’s little consistency between brokers, something similar happens with Isa eligibility.

It’s an imperfect system which sees different providers applying their own interpretation.

Please can someone explain how i report this ETF for the purpose of tax?

Do i just work out the capital gains on it and then declare it as interest income?

Thinking that this makes more sense than leaving cash in an easy access savings account.

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the same as any other ETF.

It should count as investment income not interest income.