Q: I wish to find a place for some cash. I am not entirely clear on some details for HSAV: the current trading price is around $106,60.
Of course, there are no distributions; What do you calculate the effective yield to currently be?
My trading platform suggests NAV is $106.30, so there is a premium being paid at the current price. What effect will that have on the yield? And what effect when I come to liquidate the holdings?
Last, if you see HSAV a not that good a place to deposit, what other place(s) would be good to hold some cash? BMO HISA is currently offering 4.6%
Many thanks
Of course, there are no distributions; What do you calculate the effective yield to currently be?
My trading platform suggests NAV is $106.30, so there is a premium being paid at the current price. What effect will that have on the yield? And what effect when I come to liquidate the holdings?
Last, if you see HSAV a not that good a place to deposit, what other place(s) would be good to hold some cash? BMO HISA is currently offering 4.6%
Many thanks
5i Research Answer:
The gross yield for HSAV is 5.25% and its MER is 0.15%. It does trade at a slight premium of 0.2% to NAV as Horizons suspended the issuance of new units after the ETF reached $2B in AUM. This lack of new units being created has caused the ETF to trade at a slight premium to NAV, which means that if the market price comes down to NAV, the gross yield of 5.25% could effectively become ~5.05% for the year. If the ETF continues to trade at a premium and an investor wishes to sell the ETF, that investor will be selling at the market price (at a premium to NAV).
Another HISA ETF that we like, which issues distributions is CASH.