Where to keep safe portfolio allocation in UK?

For investors outside the US. Personal investments, personal finance, investing news and theory.
Sister forums: Canada, Spain (en español)
---------------
Post Reply
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Where do UK members invest their "safe" portfolio allocation?

I have almost £500k earmarked for a home in a year or so and am keeping it safe.

Currently it earns 1% PA in my bank instant access account - of course this is only govt protected up to 85k.

Thanks.
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Where to keep safe portfolio allocation in UK?

Post by DJN »

Hi,
perhaps one way to go:
https://www.nsandi.com/easy-access-saving
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
xxd091
Posts: 498
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by xxd091 »

If you need it that soon obviously keep it all in cash-investing now will not only tie up your cash mountain but also gives the possibility of a loss!
If worried re £85000 limit spread some of it between some big banks
Too late to do much else
Buy that house as soon as reasonably possible
xxd09
DoctorE
Posts: 185
Joined: Thu Feb 13, 2014 2:11 am

Re: Where to keep safe portfolio allocation in UK?

Post by DoctorE »

Money market funds, short term gov sterling bonds ETFs, multiple savings accounts.
Risks involved in each of the options.
Not a recommendation, but some examples:

Money Market funds:
Invesco Sterling Liquidity Portfolio
https://www.invescoglobalcash.com/en-gb/the-funds
IE00B4LBWM53 4% yield, Minimum subscription amount £100,000.

ETFs on LSE via a broker and/or your bank might offer it:
https://www.justetf.com/en/etf-profile. ... 00BJP26F04
xxd091
Posts: 498
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by xxd091 »

Further thoughts
A high interest bank account ie Tesco Savings could get you £1000 of tax free interest if you are a basic taxpayer -a home for approximately £28000
An instant access Cash ISA -Skipton BS-also gives the same rate but for £20000 investment only pa -do you have a wife?
That’s about it-a couple of thousand a year safely earned
That’s it
xxd091
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

alwaysonit wrote: Fri May 12, 2023 11:58 pm Where do UK members invest their "safe" portfolio allocation?

I have almost £500k earmarked for a home in a year or so and am keeping it safe.

Currently it earns 1% PA in my bank instant access account - of course this is only govt protected up to 85k.

Thanks.
You cannot afford to lose this.

Thus only insured bank accounts are appropriate.

Notice Accounts can pay 2-3% these days.

You are insured up to £85k for each financial institution (£170k if an account shared with spouse). I would say that Lloyds, Natwest, Barclays, HSBC are all pretty safe - hard to imagine a world in which the government and the Bank of England would let depositors in those firms lose money.

Everything else I would say keep below £85k.

If you try to juice your returns above that, you are taking more risk. You might be able to find a gilt (UK govt bond) with 1 year or less to maturity and then, if you hold to maturity, that would be safe. Remember though that if you buy at a premium, you will lose money because the gilt will redeem at par value (ie £100 per £100 of bonds). So you do have to buy at a discount, to avoid that.

Even a Short Term Gilt fund has some duration (say around 2-2.5 years) and thus some risk of losing you money (if interest rates rise further: the Duration roughly measures the price move v a +/- 1% increase in interest rates, so a +1% in interest rates would, all things being equal cause a minus 2-2.5% fall in value).
StillGoing
Posts: 378
Joined: Mon Nov 04, 2019 3:43 am
Location: U.K.

Re: Where to keep safe portfolio allocation in UK?

Post by StillGoing »

alwaysonit wrote: Fri May 12, 2023 11:58 pm Where do UK members invest their "safe" portfolio allocation?

I have almost £500k earmarked for a home in a year or so and am keeping it safe.

Currently it earns 1% PA in my bank instant access account - of course this is only govt protected up to 85k.

Thanks.
My understanding is that there is a short term FSCS limit (£1m for 6 months) to cover situations where you have large funds parked (see https://www.fscs.org.uk/making-a-claim/ ... -balances/ for details)

Otherwise, the following may be possible solutions:
1) NS&I direct saver is currently paying 2.85% (nearly 1 percentage point off market leading rates, but better than 1%). The entire amount is protected.
2) If you are definitely a year away, then splitting it into 5 or 6 one year fixed rate accounts each with no more than £85k (see https://www.moneysavingexpert.com/savin ... -interest/ for best rates, but there are plenty paying well over 4%).
3) Individual gilts (although you'll need a general investment account that allows you to buy them, iweb and Hargreaves Lansdown do). Depending on your exact dates, there are gilts maturing on 31/1/24, 22/4/2024, and 7/9/2024, and 31/1/2025 all of which currently have yields to maturity of just over 4%.

Pros and cons:
1) Is relatively hassle free (we have this account, paying in and paying out is next business day). Interest is taxed (you could also set up a premium bond account since the 'interest' on these are not taxed).
2) Is hassle to set up, but will require no maintenance once done (we have some of these accounts, but with relatively small amounts because of our uncertain moving date), but there is no flexibility. Fixed rate accounts of 6, 9, and 18 months are also available (although with fewer providers). You do have to watch out that the different providers are not using the same banking group to provide FSCS protection (although joint applications will double the amount protected and halve the number of accounts needed). Interest is taxed.
3) Is hassle to set up, but once done requires no maintenance while waiting for the bonds to mature (and is more flexible than option 2 since you can sell the bonds early, possibly with a capital loss if interest rates continue to go up). Capital gains are not taxed, but coupons (interest) are, so bonds with small percentage coupons (the ones maturing at the end of January in 2024 and 2025) are best from this perspective.

Money Market funds are also a possibility (as others have said), but do have liquidity risk in the event of a crisis (i.e., your money is safe enough, but you might not have access to it - we're talking big crisis like the GFC in 2008). We have about 15% of our house fund in such funds. My understanding, is that increases in value are taxed as interest (but am willing to be corrected!).

I'm in a similar position (except the house buying date is dependent on other people - i.e., our last child at home purchasing their house), so we haven't been in a position to place our savings exactly as I would have wanted to.

cheers
StillGoing
jg12345
Posts: 438
Joined: Fri Dec 11, 2020 12:03 pm

Re: Where to keep safe portfolio allocation in UK?

Post by jg12345 »

Valuethinker wrote: Sat May 13, 2023 3:51 pm
alwaysonit wrote: Fri May 12, 2023 11:58 pm Where do UK members invest their "safe" portfolio allocation?

I have almost £500k earmarked for a home in a year or so and am keeping it safe.

Currently it earns 1% PA in my bank instant access account - of course this is only govt protected up to 85k.

Thanks.
You cannot afford to lose this.

Thus only insured bank accounts are appropriate.

Notice Accounts can pay 2-3% these days.

You are insured up to £85k for each financial institution (£170k if an account shared with spouse). I would say that Lloyds, Natwest, Barclays, HSBC are all pretty safe - hard to imagine a world in which the government and the Bank of England would let depositors in those firms lose money.

Everything else I would say keep below £85k.

If you try to juice your returns above that, you are taking more risk. You might be able to find a gilt (UK govt bond) with 1 year or less to maturity and then, if you hold to maturity, that would be safe. Remember though that if you buy at a premium, you will lose money because the gilt will redeem at par value (ie £100 per £100 of bonds). So you do have to buy at a discount, to avoid that.

Even a Short Term Gilt fund has some duration (say around 2-2.5 years) and thus some risk of losing you money (if interest rates rise further: the Duration roughly measures the price move v a +/- 1% increase in interest rates, so a +1% in interest rates would, all things being equal cause a minus 2-2.5% fall in value).
xxd091 and valuethinker suggestions are the most sound.

I would stay far from any short term, ultra short term gilts ETF or money market fund given the time you have because their duration is usually below 4 months, so there is still risk

Putting together what you heard:
- Cash ISA 20k each for you and wife, 40k is gone and earn interest tax free (if you are not filling it up with stocks)
- the rest in five 85k batches
- buy a Gilt with maturity 1 month prior to the day when you need the money, as noted by Valuethinker. If there is a coupon, you might still buy above par (100) and have a return. Your broker should show "yield" for each bond, so you can see whether the return is below 0 (I highly doubt it would be the case, these days). The main benefit is that you only have one transaction to do, but you'll pay tax on interest/capital gain

GB00BFWFPL34 for example is below par, has a 1% coupon, matures in April next year (11 months). Seems a pretty perfect choice for 460k if you can put 40k in ISA or 500k if not
DoctorE
Posts: 185
Joined: Thu Feb 13, 2014 2:11 am

Re: Where to keep safe portfolio allocation in UK?

Post by DoctorE »

jg12345 wrote: Sun May 14, 2023 4:41 am
Valuethinker wrote: Sat May 13, 2023 3:51 pm
alwaysonit wrote: Fri May 12, 2023 11:58 pm Where do UK members invest their "safe" portfolio allocation?

I have almost £500k earmarked for a home in a year or so and am keeping it safe.

Currently it earns 1% PA in my bank instant access account - of course this is only govt protected up to 85k.

Thanks.
You cannot afford to lose this.

Thus only insured bank accounts are appropriate.

Notice Accounts can pay 2-3% these days.

You are insured up to £85k for each financial institution (£170k if an account shared with spouse). I would say that Lloyds, Natwest, Barclays, HSBC are all pretty safe - hard to imagine a world in which the government and the Bank of England would let depositors in those firms lose money.

Everything else I would say keep below £85k.

If you try to juice your returns above that, you are taking more risk. You might be able to find a gilt (UK govt bond) with 1 year or less to maturity and then, if you hold to maturity, that would be safe. Remember though that if you buy at a premium, you will lose money because the gilt will redeem at par value (ie £100 per £100 of bonds). So you do have to buy at a discount, to avoid that.

Even a Short Term Gilt fund has some duration (say around 2-2.5 years) and thus some risk of losing you money (if interest rates rise further: the Duration roughly measures the price move v a +/- 1% increase in interest rates, so a +1% in interest rates would, all things being equal cause a minus 2-2.5% fall in value).
xxd091 and valuethinker suggestions are the most sound.

I would stay far from any short term, ultra short term gilts ETF or money market fund given the time you have because their duration is usually below 4 months, so there is still risk

Putting together what you heard:
- Cash ISA 20k each for you and wife, 40k is gone and earn interest tax free (if you are not filling it up with stocks)
- the rest in five 85k batches
- buy a Gilt with maturity 1 month prior to the day when you need the money, as noted by Valuethinker. If there is a coupon, you might still buy above par (100) and have a return. Your broker should show "yield" for each bond, so you can see whether the return is below 0 (I highly doubt it would be the case, these days). The main benefit is that you only have one transaction to do, but you'll pay tax on interest/capital gain

GB00BFWFPL34 for example is below par, has a 1% coupon, matures in April next year (11 months). Seems a pretty perfect choice for 460k if you can put 40k in ISA or 500k if not
There is really risk in everything but some thing to consider:
* time and cost of creating, maintaining and transferring funds at 'bank fees' for creating 5 new bank accounts for 85k GBP each...
* most banks will not be happy about this purpose of account use
* when you do need to buy the house, consider how will you aggregate the money? Will your new bank accounts start asking questions when you transfer the funds back and forth for safety? how much will this cost to transfer? what if the bank fails on the day you make the transfer if that's really the doomsday case outlined here?
* how do the millions of active UK small, medium and large corporations make payroll and fill invoices on millions of GBP each month... ? Do they move money around bank accounts or use sweeps into money market funds which are broadly diversified ?
User avatar
NearlyRetired
Posts: 350
Joined: Fri Aug 09, 2019 12:56 pm
Location: United Kingdom

Re: Where to keep safe portfolio allocation in UK?

Post by NearlyRetired »

Atom bank (all opened and managed on-line) are currently paying 3.20% AER on a no-notice account - so that may be another option for an 85K chunk
To err is to be human, to really mess up, use a computer
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

DoctorE wrote: Sun May 14, 2023 5:38 am
jg12345 wrote: Sun May 14, 2023 4:41 am
Valuethinker wrote: Sat May 13, 2023 3:51 pm
alwaysonit wrote: Fri May 12, 2023 11:58 pm Where do UK members invest their "safe" portfolio allocation?

I have almost £500k earmarked for a home in a year or so and am keeping it safe.

Currently it earns 1% PA in my bank instant access account - of course this is only govt protected up to 85k.

Thanks.
You cannot afford to lose this.

Thus only insured bank accounts are appropriate.

Notice Accounts can pay 2-3% these days.

You are insured up to £85k for each financial institution (£170k if an account shared with spouse). I would say that Lloyds, Natwest, Barclays, HSBC are all pretty safe - hard to imagine a world in which the government and the Bank of England would let depositors in those firms lose money.

Everything else I would say keep below £85k.

If you try to juice your returns above that, you are taking more risk. You might be able to find a gilt (UK govt bond) with 1 year or less to maturity and then, if you hold to maturity, that would be safe. Remember though that if you buy at a premium, you will lose money because the gilt will redeem at par value (ie £100 per £100 of bonds). So you do have to buy at a discount, to avoid that.

Even a Short Term Gilt fund has some duration (say around 2-2.5 years) and thus some risk of losing you money (if interest rates rise further: the Duration roughly measures the price move v a +/- 1% increase in interest rates, so a +1% in interest rates would, all things being equal cause a minus 2-2.5% fall in value).
xxd091 and valuethinker suggestions are the most sound.

I would stay far from any short term, ultra short term gilts ETF or money market fund given the time you have because their duration is usually below 4 months, so there is still risk

Putting together what you heard:
- Cash ISA 20k each for you and wife, 40k is gone and earn interest tax free (if you are not filling it up with stocks)
- the rest in five 85k batches
- buy a Gilt with maturity 1 month prior to the day when you need the money, as noted by Valuethinker. If there is a coupon, you might still buy above par (100) and have a return. Your broker should show "yield" for each bond, so you can see whether the return is below 0 (I highly doubt it would be the case, these days). The main benefit is that you only have one transaction to do, but you'll pay tax on interest/capital gain

GB00BFWFPL34 for example is below par, has a 1% coupon, matures in April next year (11 months). Seems a pretty perfect choice for 460k if you can put 40k in ISA or 500k if not
There is really risk in everything but some thing to consider:
* time and cost of creating, maintaining and transferring funds at 'bank fees' for creating 5 new bank accounts for 85k GBP each...
* most banks will not be happy about this purpose of account use
That does not really matter. There might be the possibility of a Hold Funds. Usually one buys a house using one's main bank account, and one sometimes has to call them up and brief them that an unusually large amount of money will be moving through the account. It will flag their security checks.
* when you do need to buy the house, consider how will you aggregate the money? Will your new bank accounts start asking questions when you transfer the funds back and forth for safety? how much will this cost to transfer? what if the bank fails on the day you make the transfer if that's really the doomsday case outlined here?
It's been quite some time since a deposit taking institution in the UK failed. Northern Rock did not fail in 2007/8, for example-- it was nationalised. It's reasonable to ask if there could be any hangups in moving £85k out of an account. TBH I would probably be moving that money into my main bank account weeks in advance, just for such hangup.
* how do the millions of active UK small, medium and large corporations make payroll and fill invoices on millions of GBP each month... ? Do they move money around bank accounts or use sweeps into money market funds which are broadly diversified ?
MMFs are just not as big on this side of the Atlantic. It's much more usual to have a Working Capital Facility, netted off against your deposit accounts, with say 2-3 banks. You will be required to keep you cash at the same bank or banks as the WCF.

Very big corporates have Treasury departments that move money around Money Markets. But post the Global Financial Crisis, everyone is more aware of the risk. That HSBC conduit (fund invested in asset-backed securities) that went down very early on in 2008 shocked everyone.

I would reckon almost all sub £100m turnover UK companies just have relationships with 2-3 main banks.
pennywiser
Posts: 177
Joined: Sat Jul 16, 2022 1:54 pm
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by pennywiser »

If you are worried about credit risk you should put it in a bank.
If you are worried about market risk you should put it in money market funds. Vanguard and Royal London are good examples.
If you want max return with zero market risk and small credit risk you can use ETFs that track GBP Sonia rate:
https://www.justetf.com/uk/etf-profile. ... 1230136894 or
https://www.justetf.com/uk/etf-profile. ... 0321464652
pennywiser
Posts: 177
Joined: Sat Jul 16, 2022 1:54 pm
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by pennywiser »

DoctorE wrote: Sun May 14, 2023 5:38 am * when you do need to buy the house, consider how will you aggregate the money? Will your new bank accounts start asking questions when you transfer the funds back and forth for safety? how much will this cost to transfer? what if the bank fails on the day you make the transfer if that's really the doomsday case outlined here?
I am sure you know this but for OP's benefit I'll post:
Savings accounts are usually tied to a single nominated account, which is usually a general bank account. I imagine I would open a general bank account with a Big Bank, deposit £500k and that will become nominated account. They I would open savings accounts tied to that nominated account, for example Atom, Cynergy etc. Only flows of money are then between savings accounts and the nominated account. All transfers @ £85k should be free (I don't remember paying a fee when I transfer money to pay for my house, or at most it would £20). On a day I need money to pay for the house you collect all money in a Big Bank and transfer from there to my solicitor to pay for the house.

But ultimately I myself would split money four ways between two MMFs and two Sonia ETFs.
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

pennywiser wrote: Sun May 14, 2023 9:18 am
DoctorE wrote: Sun May 14, 2023 5:38 am * when you do need to buy the house, consider how will you aggregate the money? Will your new bank accounts start asking questions when you transfer the funds back and forth for safety? how much will this cost to transfer? what if the bank fails on the day you make the transfer if that's really the doomsday case outlined here?
I am sure you know this but for OP's benefit I'll post:
Savings accounts are usually tied to a single nominated account, which is usually a general bank account. I imagine I would open a general bank account with a Big Bank, deposit £500k and that will become nominated account. They I would open savings accounts tied to that nominated account, for example Atom, Cynergy etc. Only flows of money are then between savings accounts and the nominated account. All transfers @ £85k should be free (I don't remember paying a fee when I transfer money to pay for my house, or at most it would £20). On a day I need money to pay for the house you collect all money in a Big Bank and transfer from there to my solicitor to pay for the house.

But ultimately I myself would split money four ways between two MMFs and two Sonia ETFs.
In a repeat of the Global Financial Crisis of 2008-09 I don't think MMFs are entirely safe?

(There can be issues with ETFs as well, there are some Canadian ones which have been frozen (relatively small)).

Money market instruments are often issued by banks and other types of financial companies. Their ability to honour those at maturity depends on being able to "roll" the liabilities - ie issue new short or long term paper. If they cannot do that, then there is a problem.

As we saw with Greece during the Euro crisis, that problem can extend to governments. Italy is always the one I worry about in the Eurozone -- large debts, erratic politics (says a UK citizen ;-)) etc.
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Thanks guys.
I am not currently a UK tax resident, so may struggle to open any new bank or savings accounts there until I move and take up residency.
I will ask each institution separately if they will accept me – NS&I already said I can buy their products.
DoctorE wrote: Sat May 13, 2023 4:34 am Invesco Sterling Liquidity Portfolio
https://www.invescoglobalcash.com/en-gb/the-funds
IE00B4LBWM53 4% yield, Minimum subscription amount £100,000.
Where can you see the 4% yield on that link? Thanks
It shows the returns over the past year, but how can I see what the bond is paying for the next year?

StillGoing wrote: Sun May 14, 2023 4:06 am 3) Individual gilts (although you'll need a general investment account that allows you to buy them, iweb and Hargreaves Lansdown do). Depending on your exact dates, there are gilts maturing on 31/1/24, 22/4/2024, and 7/9/2024, and 31/1/2025 all of which currently have yields to maturity of just over 4%.
Thanks, that sounds ideal. Do you have a link to any of them? Any idea if Interactive Brokers offer them?
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

alwaysonit wrote: Fri May 26, 2023 5:08 am Thanks guys.
I am not currently a UK tax resident, so may struggle to open any new bank or savings accounts there until I move and take up residency.
I will ask each institution separately if they will accept me – NS&I already said I can buy their products.
DoctorE wrote: Sat May 13, 2023 4:34 am Invesco Sterling Liquidity Portfolio
https://www.invescoglobalcash.com/en-gb/the-funds
IE00B4LBWM53 4% yield, Minimum subscription amount £100,000.
Where can you see the 4% yield on that link? Thanks


https://assets.invescohub.com/globalcas ... ass+uk.pdf


Check the Factsheet and also read the Risks section of both Factsheet and KIID. Says 4.3% for the latest month. Make sure you check the *sterling* fact sheet, and the class of shares that you as an individual investor can buy.

They don't specify what is in the fund in terms of exposures by name. So you have to trust they've got their credit selection right (in normal circumstances, they probably do). It's not riskless, in other words.

Thanks, that sounds ideal. Do you have a link to any of them? Any idea if Interactive Brokers offer them?
If you match the maturity of the gilt with your need for cash that will work. Any other situation then you are taking reinvestment risk (for gilt maturities shorter than your need for the cash) or interest rate risk (for gilt maturities longer than the need for cash).

(to be pedantic, unless you buy a stripped (0 coupon) gilt, you are going to always have interest rate risk for the coupon. But that is a small part of the total return for a gilt with maturity of less than 5 years).
StillGoing
Posts: 378
Joined: Mon Nov 04, 2019 3:43 am
Location: U.K.

Re: Where to keep safe portfolio allocation in UK?

Post by StillGoing »

alwaysonit wrote: Fri May 26, 2023 5:08 am Thanks guys.
I am not currently a UK tax resident, so may struggle to open any new bank or savings accounts there until I move and take up residency.
I will ask each institution separately if they will accept me – NS&I already said I can buy their products.
DoctorE wrote: Sat May 13, 2023 4:34 am Invesco Sterling Liquidity Portfolio
https://www.invescoglobalcash.com/en-gb/the-funds
IE00B4LBWM53 4% yield, Minimum subscription amount £100,000.
Where can you see the 4% yield on that link? Thanks
It shows the returns over the past year, but how can I see what the bond is paying for the next year?

StillGoing wrote: Sun May 14, 2023 4:06 am 3) Individual gilts (although you'll need a general investment account that allows you to buy them, iweb and Hargreaves Lansdown do). Depending on your exact dates, there are gilts maturing on 31/1/24, 22/4/2024, and 7/9/2024, and 31/1/2025 all of which currently have yields to maturity of just over 4%.
Thanks, that sounds ideal. Do you have a link to any of them? Any idea if Interactive Brokers offer them?
As far as I can tell, interactive brokers do allow individual bonds to be bought (but you'd have to check with them).

Tradeweb (https://reports.tradeweb.com/account/login/) is a good place to look at gilt prices, yields, and ISIN numbers (although the prices are a day behind). Obtaining an account is free.

Up to date prices can be found at https://www.londonstockexchange.com/liv ... egories=14 and probably at interactive brokers (there's a bond search tool, but I don't have an account so cannot look in detail).

As valuethinker said, coupons do have reinvestment risk, but some gilts now have very low coupons (e.g. out of the ones I listed above, the 31/1/24 and 31/1/25 ones have a coupon of 0.125% and 0.25%, respectively. The other two have higher coupons (2.75% in the case of 7/9/2024). Since the coupons also potentially attract tax, low coupons are good in this regard too.

cheers
StillGoing
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

pennywiser wrote: Sun May 14, 2023 8:32 am If you are worried about credit risk you should put it in a bank.
If you are worried about market risk you should put it in money market funds. Vanguard and Royal London are good examples.
If you want max return with zero market risk and small credit risk you can use ETFs that track GBP Sonia rate:
https://www.justetf.com/uk/etf-profile. ... 1230136894 or
https://www.justetf.com/uk/etf-profile. ... 0321464652
The ETFs tracking the GBP Sonia rate sound the most easily accessible and understandable option for me.
How exactly do they manage to track the rate?
Thanks
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

alwaysonit wrote: Tue May 30, 2023 11:47 pm
pennywiser wrote: Sun May 14, 2023 8:32 am If you are worried about credit risk you should put it in a bank.
If you are worried about market risk you should put it in money market funds. Vanguard and Royal London are good examples.
If you want max return with zero market risk and small credit risk you can use ETFs that track GBP Sonia rate:
https://www.justetf.com/uk/etf-profile. ... 1230136894 or
https://www.justetf.com/uk/etf-profile. ... 0321464652
The ETFs tracking the GBP Sonia rate sound the most easily accessible and understandable option for me.
How exactly do they manage to track the rate?
Thanks
On the Lyxor one it says they use Synthetic Swap (ie derivatives). So they sign a contract with a bank (banks) to give them SONIA performance.

Through several financial ructions this has always worked (swaps in general). It is however dependent on the counterparty credit risk -- that's always there.
daviddem
Posts: 309
Joined: Wed Jul 06, 2016 12:53 pm

Re: Where to keep safe portfolio allocation in UK?

Post by daviddem »

83% of your money is at risk in case your bank goes bankrupt, and at 1% yield it's fast getting eaten away by inflation.

I wouldn't call that safe.

You're still much better off with a money market mutual fund, at least the risk is spread on many banks and companies and it will yield 4.25+ % compounding daily (4.39% for the Sterling Invesco fund suggested above), at least enough to make up for some / most of the inflation. Reputable money market funds have been operating for many decades and went unscathed through 2008 and 2020. Also much has changed in the way MMF are regulated following the lessons learned in 2008. And further reforms are considered following the market stress of 2020. Since they invest in very short-term instruments and very high credit quality issues, there is no interest rate risk and practically no default risk -> your capital is at very minimal risk. Large corporations and even governments entrust huge piles of cash to money market funds.

Money-market-like-ETFs like those suggested above may seem OK but:

- many are synthetic -> you pick up counterparty risk
- transaction costs + bid-ask spread of ETFs are more expensive than transaction costs on money market mutual funds
- money market mutual funds are strictly regulated with liquidity requirements, credit quality requirements, duration requirements, diversification requirements, daily reporting requirements. Money market ETFs are not.
- money market mutual funds are very important to the good functioning of the financial system, and in times of liquidity crisis like 2008 and 2020, central banks provide support (direct or indirect) to improve liquidity and restore confidence.
Where can you see the 4% yield on that link? Thanks
Here (Institutional Accumulation Class): https://www.invescomanagementcompany.ie ... -fund-data

This can be purchased / sold via Interactive Brokers Mutual Funds for the equivalent of $5.95 per transaction, no matter the size of the transaction
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

daviddem wrote: Wed May 31, 2023 5:09 am 83% of your money is at risk in case your bank goes bankrupt, and at 1% yield it's fast getting eaten away by inflation.
I suggested having accounts at more than 1 financial institution.
I wouldn't call that safe.
AFAIK it's been a very long time (over 100 years?) that a British bank went bust and the depositors were not made whole. But Too Big to Fail? Well Barclays, Lloyds, Natwest, HSBC, Nationwide at least.

Notice Accounts pay more than 1%
You're still much better off with a money market mutual fund, at least the risk is spread on many banks and companies and it will yield 4.25+ % compounding daily (4.39% for the Sterling Invesco fund suggested above), at least enough to make up for some / most of the inflation. Reputable money market funds have been operating for many decades and went unscathed through 2008 and 2020.
I've never heard anyone refer to 2008 and MMFs as "unscathed". Granted, the worst disaster was the oldest MMF in the USA - the Primary Reserve fund. But money markets froze. And the problem of contagion between banks and companies remains in a financial crisis. Without the benefit of government provided insurance.
Also much has changed in the way MMF are regulated following the lessons learned in 2008. And further reforms are considered following the market stress of 2020. Since they invest in very short-term instruments and very high credit quality issues, there is no interest rate risk and practically no default risk -> your capital is at very minimal risk. Large corporations and even governments entrust huge piles of cash to money market funds.
They do, but they also watch them like hawks. And they have no real alternatives - if you have that scale of resources.

I am not sure what the changes were in European MMFs post 2008? However they may have been made safer. As European MMFs could always "break the buck" ie go below 1.00 par value, in principle they are not as vulnerable to a run. (Technically I think they are called "Cash Funds" rather than MMFs?).
Money-market-like-ETFs like those suggested above may seem OK but:

- many are synthetic -> you pick up counterparty risk
- transaction costs + bid-ask spread of ETFs are more expensive than transaction costs on money market mutual funds
- money market mutual funds are strictly regulated with liquidity requirements, credit quality requirements, duration requirements, diversification requirements, daily reporting requirements. Money market ETFs are not.
- money market mutual funds are very important to the good functioning of the financial system, and in times of liquidity crisis like 2008 and 2020, central banks provide support (direct or indirect) to improve liquidity and restore confidence.
In the US it was the US Treasury, I believe. And in the UK the bank bailouts (remember the biggest issuers of money market paper are financial institutions) it was HM Treasury.

The Dodd Frank Act clarified that the US Treasury can no longer do a bailout as they did of MMFs, without express Act by Congress. Which would be unlikely, arguably, as neither party would want to be seen to be bailing greedy financiers out.
Where can you see the 4% yield on that link? Thanks
Here (Institutional Accumulation Class): https://www.invescomanagementcompany.ie ... -fund-data

This can be purchased / sold via Interactive Brokers Mutual Funds for the equivalent of $5.95 per transaction, no matter the size of the transaction
it's not necessarily a bad place to put funds, but one should not characterise a MMF as safe and a bank account as risky-- when we are talking about £85k per institution (which is absolutely safe in a bank account). Particularly given that the largest part of the MMF may be invested in the paper of financial institutions (including insurance companies).
DJN
Posts: 996
Joined: Sun Nov 19, 2017 11:30 pm

Re: Where to keep safe portfolio allocation in UK?

Post by DJN »

Hi,
I believe that 5 banks based in the UK went bust in the GFC:
Bradford & Bingley
Heritable Bank
Icesave
Kaupthing, Singer & Friedlander
London Scottish Bank
In addition of course Northern Rock, HBOS, Lloyds and Royal Bank of Scotland etc were bailed out.
In near history say since 1990, in the early 90's a bunch of smaller banks were bailed out. Including Authority Bank, Eddington Bank, Chancery Bank and BCMB for example.
BCCI went under in 1991, a wee case of fraud from memory.
Barings of course went bust in 1995
In 2009 Dunfermline Building Society went under.
Looks like the UK is no more sound than most places.
DJN
Yah shure. | Have a look at the Bogleheads Wiki in the first instance.
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

DJN wrote: Wed May 31, 2023 11:16 am Hi,
I believe that 5 banks based in the UK went bust in the GFC:
Bradford & Bingley
Heritable Bank
Icesave
Kaupthing, Singer & Friedlander
London Scottish Bank
In addition of course Northern Rock, HBOS, Lloyds and Royal Bank of Scotland etc were bailed out.
In near history say since 1990, in the early 90's a bunch of smaller banks were bailed out. Including Authority Bank, Eddington Bank, Chancery Bank and BCMB for example.
BCCI went under in 1991, a wee case of fraud from memory.
Barings of course went bust in 1995
In 2009 Dunfermline Building Society went under.
Looks like the UK is no more sound than most places.
DJN
The UK was an epicentre of the Global Financial Crisis. We had the largest financial insolvency (RBS - then the ?largest? (I think it was the 4th largest but not sure) bank by assets in the world). Plus almost the first (Northern Rock, a former Building Society). Relative to our economy our crisis was at least as large as the US one to its economy.

(Lloyds was actually fine, until it bought HBOS). BCCI was indeed fraud on quite a large scale and one or two Local Authorities lost their shirts. Barings was tiny (less than £1bn) - just spectacular because of the derivative contracts involved and the "Rogue Trader" Nic Leeson.

But that's not my point. My point was that all depositors were made whole, regardless of size, with to my knowledge one exception:

- there was an issue with one of the Icelandic banks, that its depositors (which included some Local Authorities for £10m levels) were actually backstopped by the government of Iceland, *not* the UK government. A point about the licensing and the agreements between banking regulators which had not been appreciated.

(I have the same reservation about Revolut, the massively successful online bank)

I am not sure where that go to re the Icelandic bank. Eventually I think there was a deal between the UK govt and the Icelandic one.
daviddem
Posts: 309
Joined: Wed Jul 06, 2016 12:53 pm

Re: Where to keep safe portfolio allocation in UK?

Post by daviddem »

For those who wish to gain a better understanding of the short term money market in general, money market funds in the US and in Europe, how they fared throughout 2008 and 2020, how central banks intervened to stabilise these markets, how MMF were reformed since then and how they might further be reformed, see below a few very insightful links. The Blackrock articles are particularly good. The immfa links give a very good summary of the different types of money market funds currently available in Europe and how they are regulated.

https://www.immfa.org/about-mmfs/investor-help.html
https://www.immfa.org/about-mmfs/about-mmf.html
https://www.blackrock.com/corporate/lit ... y-2020.pdf
https://www.blackrock.com/corporate/lit ... y-2020.pdf
https://www.esrb.europa.eu/pub/pdf/repo ... 618.en.pdf
https://www.investopedia.com/articles/e ... ltdown.asp
https://en.wikipedia.org/wiki/Reserve_Primary_Fund

Additionally, note that in the worst run on a MMF in recent history (The Reserve Primary Fund in 2008), investors eventually recovered 99.1 cents on the dollar, most of which within a year of the liquidation of the fund. In 2020, no MMF in the US or Europe failed to meet redemption requests, or broke the boundaries of their mandates. Granted, central banks intervened to stabilise the markets but at no cost to taxpayers (not bailouts).

Yes it might seem "safer" to keep your money in insured bank accounts, but the cost of that is a dismal yield and your capital getting eaten away by inflation. Either that or you have to lock up your money for a fixed amount of time in time deposit accounts or certificates of deposit.

Also if you do trust short-term sovereign debt over private debt, you can opt for a sovereign money market fund at the cost of a little yield compared to "prime" private debt funds. Unfortunately, proper CNAV EUR and GBP sovereign money market funds are few and far between and often have a minimum investment inaccessible to most.

Long story short, money market funds from reputable investment firms like Blackrock, Aberdeen, Invesco, Lombard-Odier, Pictet etc have existed for many decades and made it through 2008 and 2020 without loosing any money to their investors, without imposing any redemption gates or fees and without crossing the boundaries of their mandates. There certainly have been many more bank failures throughout these periods than there have been money market fund failures.
minimalistmarc
Posts: 1644
Joined: Fri Jul 24, 2015 4:38 pm

Re: Where to keep safe portfolio allocation in UK?

Post by minimalistmarc »

xxd091 wrote: Sat May 13, 2023 4:29 am If you need it that soon obviously keep it all in cash-investing now will not only tie up your cash mountain but also gives the possibility of a loss!
If worried re £85000 limit spread some of it between some big banks
Too late to do much else
Buy that house as soon as reasonably possible
xxd09
NSI has unlimited protection so no need to spread
xxd091
Posts: 498
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by xxd091 »

£50000 limit on Premium Bonds?
Gets £98000 working tax free -could double this if have a partner you trust!
xxd091
pennywiser
Posts: 177
Joined: Sat Jul 16, 2022 1:54 pm
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by pennywiser »

alwaysonit wrote: Tue May 30, 2023 11:47 pm
pennywiser wrote: Sun May 14, 2023 8:32 am If you are worried about credit risk you should put it in a bank.
If you are worried about market risk you should put it in money market funds. Vanguard and Royal London are good examples.
If you want max return with zero market risk and small credit risk you can use ETFs that track GBP Sonia rate:
https://www.justetf.com/uk/etf-profile. ... 1230136894 or
https://www.justetf.com/uk/etf-profile. ... 0321464652
The ETFs tracking the GBP Sonia rate sound the most easily accessible and understandable option for me.
How exactly do they manage to track the rate?
Both ETFs are swap based. Definitely make sure you are comfortable with the concept before you invest.
https://www.justetf.com/en/academy/synt ... -etfs.html
pennywiser
Posts: 177
Joined: Sat Jul 16, 2022 1:54 pm
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by pennywiser »

Valuethinker wrote: Mon May 15, 2023 3:09 am In a repeat of the Global Financial Crisis of 2008-09 I don't think MMFs are entirely safe?
Not entirely safe, but then the question is whether one considers higher performance vs bank accounts to be a sufficient compensation for slightly higher risk. Some do and some don't, however it is good to outline options when OP implies he seeks higher return.
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

daviddem wrote: Wed May 31, 2023 12:15 pm For those who wish to gain a better understanding of the short term money market in general, money market funds in the US and in Europe, how they fared throughout 2008 and 2020, how central banks intervened to stabilise these markets, how MMF were reformed since then and how they might further be reformed, see below a few very insightful links. The Blackrock articles are particularly good. The immfa links give a very good summary of the different types of money market funds currently available in Europe and how they are regulated.

https://www.immfa.org/about-mmfs/investor-help.html
https://www.immfa.org/about-mmfs/about-mmf.html
https://www.blackrock.com/corporate/lit ... y-2020.pdf
https://www.blackrock.com/corporate/lit ... y-2020.pdf
https://www.esrb.europa.eu/pub/pdf/repo ... 618.en.pdf
https://www.investopedia.com/articles/e ... ltdown.asp
https://en.wikipedia.org/wiki/Reserve_Primary_Fund

Additionally, note that in the worst run on a MMF in recent history (The Reserve Primary Fund in 2008), investors eventually recovered 99.1 cents on the dollar, most of which within a year of the liquidation of the fund. In 2020, no MMF in the US or Europe failed to meet redemption requests, or broke the boundaries of their mandates. Granted, central banks intervened to stabilise the markets but at no cost to taxpayers (not bailouts).

Yes it might seem "safer" to keep your money in insured bank accounts, but the cost of that is a dismal yield and your capital getting eaten away by inflation. Either that or you have to lock up your money for a fixed amount of time in time deposit accounts or certificates of deposit.

Also if you do trust short-term sovereign debt over private debt, you can opt for a sovereign money market fund at the cost of a little yield compared to "prime" private debt funds. Unfortunately, proper CNAV EUR and GBP sovereign money market funds are few and far between and often have a minimum investment inaccessible to most.

Long story short, money market funds from reputable investment firms like Blackrock, Aberdeen, Invesco, Lombard-Odier, Pictet etc have existed for many decades and made it through 2008 and 2020 without loosing any money to their investors, without imposing any redemption gates or fees and without crossing the boundaries of their mandates. There certainly have been many more bank failures throughout these periods than there have been money market fund failures.
Thank you for the interesting links.
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Valuethinker wrote: Wed May 31, 2023 3:34 am
alwaysonit wrote: Tue May 30, 2023 11:47 pm
pennywiser wrote: Sun May 14, 2023 8:32 am If you are worried about credit risk you should put it in a bank.
If you are worried about market risk you should put it in money market funds. Vanguard and Royal London are good examples.
If you want max return with zero market risk and small credit risk you can use ETFs that track GBP Sonia rate:
https://www.justetf.com/uk/etf-profile. ... 1230136894 or
https://www.justetf.com/uk/etf-profile. ... 0321464652
The ETFs tracking the GBP Sonia rate sound the most easily accessible and understandable option for me.
How exactly do they manage to track the rate?
Thanks
On the Lyxor one it says they use Synthetic Swap (ie derivatives). So they sign a contract with a bank (banks) to give them SONIA performance.

Through several financial ructions this has always worked (swaps in general). It is however dependent on the counterparty credit risk -- that's always there.
What would the bank gain from this agreement?
daviddem
Posts: 309
Joined: Wed Jul 06, 2016 12:53 pm

Re: Where to keep safe portfolio allocation in UK?

Post by daviddem »

alwaysonit wrote: Tue Jun 06, 2023 3:59 am What would the bank gain from this agreement?
They get a fee. They also get the cash from the ETF investors, which they can use to generate returns hopefully higher than the index returns they have to pay to the ETF.

https://www.justetf.com/en/academy/synt ... -etfs.html
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

daviddem wrote: Tue Jun 06, 2023 4:32 am
alwaysonit wrote: Tue Jun 06, 2023 3:59 am What would the bank gain from this agreement?
They get a fee. They also get the cash from the ETF investors, which they can use to generate returns hopefully higher than the index returns they have to pay to the ETF.

https://www.justetf.com/en/academy/synt ... -etfs.html
Is this fee generally shown?
So they use our "safe" part of our portfolio to invest in something more risky (I assume they need to do this to generate higher returns)?
What happens if they lose our money in this different investment - how will they honour the swap contract?
daviddem
Posts: 309
Joined: Wed Jul 06, 2016 12:53 pm

Re: Where to keep safe portfolio allocation in UK?

Post by daviddem »

alwaysonit wrote: Tue Jun 06, 2023 10:45 pm Is this fee generally shown?
So they use our "safe" part of our portfolio to invest in something more risky (I assume they need to do this to generate higher returns)?
What happens if they lose our money in this different investment - how will they honour the swap contract?
The fee the counterparty gets might be shown if you dig in the prospectus.

Read the link I sent, they get the cash from the ETF but they have to post whatever they invest it in as collateral, so it's a secured loan from the ETF to the counterparty. If the counterparty cannot honor their contract of paying the return of the index, the ETF can sell the collateral to make up for it. If the collateral looses value and its value cannot cover the loan anymore, the counterparty has to post more collateral. If the counterparty cannot post more collateral because they are bust, then the current collateral will be sold to make the ETF investors (almost) whole. So the risk is not zero for the ETF investors, but it is minimized.

More reading here: https://www.justetf.com/en/news/etf/how ... -risk.html
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Thanks a million!

I have £350k of this in my instant access account that I want to optimise.
I cannot open any new UK savings accounts as a non-resident.

I currently have 2 instant access accounts with 2 different institutions.
Each of these are tiered, if I keep over 100k with bank A they pay 1.5%, and if I keep over 100k with bank B they pay 2.15%.

Thinking to put 100k in each of these, and 150k in this Sonia tracker that was suggested;
https://www.justetf.com/uk/etf-profile. ... 1230136894

What are the usual bid-ask spreads on something like this?
I currently don't pay for LSE market data, but can see that on another exchange the bid-ask is 99.07-99.26.

Any constructive criticism to the above approach is welcome :)
pennywiser
Posts: 177
Joined: Sat Jul 16, 2022 1:54 pm
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by pennywiser »

alwaysonit wrote: Wed Jun 07, 2023 10:34 pm What are the usual bid-ask spreads on something like this?
I currently don't pay for LSE market data, but can see that on another exchange the bid-ask is 99.07-99.26.
Degiro this morning quotes for GBP fund:
Bid: 106,900
Ask: 106,941
So 0.038% spread, seems very reasonable to me.

99.07 you've seen seems to be for EUR ETF, I am assuming you need GBP.

I think this is a good choice if you are looking for higher performance of your cash.
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Thanks.

I imagine only those that want to withdraw or use the dividends the dividends would use the distributing fund, and the accumulating fund would be more simple.
Would the accumulating fund also make the tax side of things easier?
TedSwippet
Posts: 5203
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Where to keep safe portfolio allocation in UK?

Post by TedSwippet »

alwaysonit wrote: Fri Jun 16, 2023 9:42 pm I imagine only those that want to withdraw or use the dividends the dividends would use the distributing fund, and the accumulating fund would be more simple.
Would the accumulating fund also make the tax side of things easier?
For some countries, perhaps -- so maybe for you as a non-UK resident -- but for UK residents, usually the reverse. Even though you don't receive them directly, the UK taxes accumulated dividends annually as if received, meaning you later back them out for any capital gains tax calculations. Full explanation here:

Accumulation units – tax on reinvested dividends UK - Monevator

In general, for UK investors, accumulation funds are fine for ISAs, SIPPs, and so on, but distributing is usually best for taxable accounts. Your own situation may differ, of course.
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Thanks.
Sounds like I want to own the accumulating version now as a non-resident and then buy and sell it for the distributing version before I take up residency.
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

I invested in CSH2.
https://www.justetf.com/uk/etf-profile. ... 1230136894

I am essentially earning interest, but it is paid as dividends.
Does this mean it is subject to dividend tax rather than income tax?

I will be tax liable from the next tax year, so I assume I should change it to a distributing fund for ease of calculating my tax returns.
Is this the distributing version of it?
https://www.justetf.com/uk/etf-profile. ... 0321464652
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

alwaysonit wrote: Sat Mar 02, 2024 4:34 am I invested in CSH2.
https://www.justetf.com/uk/etf-profile. ... 1230136894

I am essentially earning interest, but it is paid as dividends.
Does this mean it is subject to dividend tax rather than income tax?

I will be tax liable from the next tax year, so I assume I should change it to a distributing fund for ease of calculating my tax returns.
Is this the distributing version of it?
https://www.justetf.com/uk/etf-profile. ... 0321464652
It will be taxed as interest income unless you get a steer otherwise.

It says "distributing" right not the description?
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Valuethinker wrote: Sat Mar 02, 2024 12:02 pm It says "distributing" right not the description?
I'm unsure what your question is.
The first link I posted is accumulating, the second one is distributing.
jg12345
Posts: 438
Joined: Fri Dec 11, 2020 12:03 pm

Re: Where to keep safe portfolio allocation in UK?

Post by jg12345 »

alwaysonit wrote: Sat Mar 02, 2024 4:34 am I invested in CSH2.
https://www.justetf.com/uk/etf-profile. ... 1230136894

I am essentially earning interest, but it is paid as dividends.
Does this mean it is subject to dividend tax rather than income tax?

I will be tax liable from the next tax year, so I assume I should change it to a distributing fund for ease of calculating my tax returns.
Is this the distributing version of it?
https://www.justetf.com/uk/etf-profile. ... 0321464652
1- yes, distributing way better
2- They are not exactly the same, because the CSH2 uses a proprietary Lyxor index (I suppose to keep costs down). However, they are similar as the benchmark for the Lyxor one is SONIA 100%, which is the index tracked by the Xtracker one. I think for your purposes you can probably consider them the same.
Valuethinker
Posts: 49129
Joined: Fri May 11, 2007 11:07 am

Re: Where to keep safe portfolio allocation in UK?

Post by Valuethinker »

alwaysonit wrote: Sun Mar 03, 2024 3:36 am
Valuethinker wrote: Sat Mar 02, 2024 12:02 pm It says "distributing" right not the description?
I'm unsure what your question is.
The first link I posted is accumulating, the second one is distributing.
I misread what you posted - I meant that the 2nd one was a distributing fund, as per the nameplate.

However your question was actually whether it was the twin of the accumulating fund?
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

Valuethinker wrote: Mon Mar 04, 2024 2:58 am However your question was actually whether it was the twin of the accumulating fund?
Yep, that was the question.
I want to sell my full holdings of CSH2 on 5th April and immediately buy it's distributing version.
Topic Author
alwaysonit
Posts: 158
Joined: Wed Sep 10, 2014 3:24 pm

Re: Where to keep safe portfolio allocation in UK?

Post by alwaysonit »

I will sell CSH2 and buy XSTR in a couple days time.
I assume XSTR is the closest I can get to a distributing twin of CSH2?
Post Reply