Q: I am looking to park some cash for a while but have it relatively easily accessible. I understand that these ETF’s are not CDIC insurable but other than that what is the downside/risk of these ETFs and which one would you consider the best? Also I noticed that these etf’s are trading above their set value…$50.14. Under what circumstances would they trade back to their $50.00 value?
5i Research Answer:
They are still ETFs, and can trade on supply/demand. CASH did dip below $50 in May; PSA has not gone below in the past year. While not guaranteed in the sense of the word, we would consider risk to be as minimal as can be. Investments are short term deposits and large banks. The main risk is if they trade at a premium, as HSAV has done in the past. But it pays no distributions and investors at times are willing to pay up for the tax benefit of that. We are largely indifferent but CASH has a slightly higher indicated yield currently and we would side with it.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in PSA.