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  5. HSAV: If the Cdn $$ declines when rates go down, do you expect High-Interest ETF's that invest only in the Cdn $$ will also decline proportionately? [Global X Cash Maximizer Corporate Class ETF]
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Q: If the Cdn $$ declines when rates go down, do you expect High-Interest ETF's that invest only in the Cdn $$ will also decline proportionately? Also what about HSAV and HSUV>U? Thanks
Asked by george on May 06, 2024
5i Research Answer:

Yes and no; These ETFs invest in short term instruments, and yields and distributions will adjust if rates move down. But the Canadian dollar ETFs will not be impacted by a Canadian dollar decline. HSAV and HSAV.U do not pay distributions, but the gains in unit value will slow as rates come down. But if US rates are stable or decline less than in Canada, then HSAV.U should hold up better as it is US-dollar based.