Personal Finance

High Interest Cash ETFs (< 5.02%) [CAD/USD] [CDIC: NO!] + Money Market ETFs

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  • Feb 4th, 2023 3:10 pm
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Deal Addict
Mar 30, 2009
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I just updated the thread summary to reflect new yield for PSA. The net yield is now 4.84%.
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Jun 4, 2007
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Longueuil
X360 wrote: Usually, these CASH ETFs price are very closed to the NAV.
When you see 3 cents spread vs NAV then probably you see it on Friday before the weekend as the price expected to have few more cents accounted for Saturday, Sunday 2 days interest.
Well i bought a few on monday and the spread wasnt really good. Anyway i bought only a few shares so it was ok to pay the sell price. If by 15h30 nobody sold to me, i buy at the sell price :-/
Newbie
Nov 25, 2022
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frugal1 wrote: I just updated the thread summary to reflect new yield for PSA. The net yield is now 4.84%.
HISA too. Yield of 4.99% - 0.15% effective 2023-01-26
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Jun 4, 2007
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Longueuil
frugal1 wrote: I just updated the thread summary to reflect new yield for PSA. The net yield is now 4.84%.
And i had a "web alert monitor" on android checking every 30 minutes the psa page (and others) but you beat me to it :-P
PSA doesnt disappoint. They added the full 0,25%. I still wonder if tomorrow we will have a 10$ share price instead of 50$.

HORIZONS should put a 5,02% gross yield tomorrow between 9am et 10am (if history is a guide), which would give a 5,02% - 0.13% = 4,89% net :-D
Deal Addict
May 13, 2005
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Montreal
nicoco3000 wrote: Well i bought a few on monday and the spread wasnt really good. Anyway i bought only a few shares so it was ok to pay the sell price. If by 15h30 nobody sold to me, i buy at the sell price :-/
I think they only update the NAV at the end of the business trading day.

Monday, you buy and see the price having 3 cents above the previous business trading day = Friday NAV. This is expected as
Monday price = Friday NAV + Saturday, Sunday 2 days interests (3 cents).

For next Monday, we could double check about this and see NAV update at the end of Monday trading day closed to the price or not.

Image

Soon or later we're all expert at trading these CASH ETFs lol...
Last edited by X360 on Jan 28th, 2023 9:01 am, edited 1 time in total.
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Jan 11, 2020
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primordialSingularit…
nicoco3000 wrote: Hope you like your .25 Grinning Face With Smiling Eyes
Woohoo! Christmas came early. Hope we get more rate hikes so savers can finally be rewarded in this nation of debtors.
oakcan wrote: HISA too. Yield of 4.99% - 0.15% effective 2023-01-26
Damn they're stingy, they couldn't give us that extra 0.01%? Well to be fair, they are giving us a rate above the BoC overnight.
frugal1 wrote: I just updated the thread summary to reflect new yield for PSA. The net yield is now 4.84%.
Thanks, I'm tied up with school work (yet procrastinate here). So any updates are very appreciated.
Last edited by ADenariusSaved on Jan 25th, 2023 2:15 pm, edited 1 time in total.
Member
Mar 5, 2005
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frugal1 wrote: I just updated the thread summary to reflect new yield for PSA. The net yield is now 4.84%.

How is the yield on this 4.84%? The distribution went down slightly from the previous month. If I project the same distribution per month out for 12 months, I get 4.10%. How do they calculate a 4.84% yield?

Thanks.
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Mar 30, 2009
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ADenariusSaved wrote: Thanks, I'm tied up with school work (yet procrastinate here). So any updates are very appreciated.
No problem.

By the way, I just updated the summary to change "Gross Yield" to "Distribution Yield" for the two money market funds that are listed. The "Distribution Yield" that is posted on the respective websites is net of fees and expenses. It's the equivalent to the net yield for the other ETFs. So in order to do a proper comparison for CRM and CASH, for example, you simply look at the distribution yield for CRM (4.79%), but you need to take the gross yield of CASH and subtract it by its MER (4.78% - 0.13% = 4.65%).
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Mar 30, 2009
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RoadRunner wrote: How is the yield on this 4.84%? The distribution went down slightly from the previous month. If I project the same distribution per month out for 12 months, I get 4.10%. How do they calculate a 4.84% yield?

Thanks.
It's the yield going forward and not a reflection of past distributions.
Member
Mar 5, 2005
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frugal1 wrote: It's the yield going forward and not a reflection of past distributions.
I didn't use past distributions. I took the latest distribution and projected it forward for 12 months. This resulted in 4.10%
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primordialSingularit…
frugal1 wrote: No problem.

By the way, I just updated the summary to change "Gross Yield" to "Distribution Yield" for the two money market funds that are listed. The "Distribution Yield" that is posted on the respective websites is net of fees and expenses. It's the equivalent to the net yield for the other ETFs. So in order to do a proper comparison for CRM and CASH, for example, you simply look at the distribution yield for CRM (4.79%), but you need to take the gross yield of CASH and subtract it by its MER (4.78% - 0.13% = 4.65%).
Oh yeah, that one lol, I think I flipped back and forth between those two terms. If you've figured it out, giddy up! Thanks!
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Feb 1, 2014
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nicoco3000 wrote: PSA doesnt disappoint. They added the full 0,25%. I still wonder if tomorrow we will have a 10$ share price instead of 50$.
What are the implications of this? Do you know? I'm still trying to figure this out. Apparently it's all pretty normal but I don't really understand how it works. Apparently the NAV will remain fixed at $10.00 and the interest will simply be paid out on the payment date.
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Jun 4, 2007
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Longueuil
Kaplano wrote: What are the implications of this? Do you know? I'm still trying to figure this out. Apparently it's all pretty normal but I don't really understand how it works. Apparently the NAV will remain fixed at $10.00 and the interest will simply be paid out on the payment date.
If by friday it's really 10$ instead of 50$ i only see this positive for people with less money (that said, does a 50$ share is that high?) or... when you are paid your distribution it's easier to reinvest the small monthly amount in 10$ shares instead of 50$ shares. That would be a plus for me, and for Purpose if they attract more people (as they wont have the best rate... unless Horizons disappoints me tomorrow with their new rate).
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Feb 12, 2016
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RoadRunner wrote: I didn't use past distributions. I took the latest distribution and projected it forward for 12 months. This resulted in 4.10%
I was a victim of the same math as you but my friend X360 told us that it has to do with the number of days between ex dividend each month. Its different each month for each ETF.
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primordialSingularit…
dealhawk1 wrote: I was a victim of the same math as you but my friend X360 told us that it has to do with the number of days between ex dividend each month. Its different each month for each ETF.
Someone's gotta check though, otherwise the financial institutions would just pull a fast-one on us.
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Jan 16, 2009
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Vancouver
I was trying to calculate, is it worth it to actually buy on ex-dividend date at 50.01 (lose 1 cent), and sell at day before ex dividend date (lose another cent) each month, add in your trading commission costs, to earn Capital gain each month instead of taxable income?

Let's assume $100,000 (2000 shares of PSA) in your taxable account:

Assuming PSA distribution this month (0.17 yield)

Interest earned 0.17 * 2000 = $340
Lose 2 cents = $40; lose commission = $20

net gain = $280 capital gain @ 15% taxable = $242

whereas holding = $340 income @ 40% taxable = $204 (could be lower taxable in each case)

It's actually not much difference holding it unless you have a much larger sum in these ETFs.
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May 13, 2005
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wayneg9999 wrote: I was trying to calculate, is it worth it to actually buy on ex-dividend date at 50.01 (lose 1 cent), and sell at day before ex dividend date (lose another cent) each month, add in your trading commission costs, to earn Capital gain each month instead of taxable income?

Let's assume $100,000 (2000 shares of PSA) in your taxable account:

Assuming PSA distribution this month (0.17 yield)

Interest earned 0.17 * 2000 = $340
Lose 2 cents = $40; lose commission = $20

net gain = $280 capital gain @ 15% taxable = $242

whereas holding = $340 income @ 40% taxable = $204 (could be lower taxable in each case)

It's actually not much difference holding it unless you have a much larger sum in these ETFs.
There is a big different if we have capital losses then we could offset these capital gains and don't have to pay taxes ==> get full interest income.

If we receive as interest income then we can't use it for capital losses.
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Mar 5, 2005
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dealhawk1 wrote: I was a victim of the same math as you but my friend X360 told us that it has to do with the number of days between ex dividend each month. Its different each month for each ETF.

I have since learnt that the gross yield is not tied to distributions. The fund earns interest at the overnight bank rate which, as of today, is 4.5% plus a yield premium of 0.49%. This gives a gross yield of 4.99%. Waiting to find out if the 0.49% is a yield premium that is fixed by agreement with the deposit banks or subject to change .
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Feb 12, 2016
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RoadRunner wrote: I have since learnt that the gross yield is not tied to distributions. The fund earns interest at the overnight bank rate which, as of today, is 4.5% plus a yield premium of 0.49%. This gives a gross yield of 4.99%. Waiting to find out if the 0.49% is a yield premium that is fixed by agreement with the deposit banks or subject to change .
I was trippin out last month myself when PSA gave a distribution higher than CASH yet Horizons claimed a higher interest rate. The only person to respond and make some sense was X360. We are both too lazy to do the math but it makes sense. If you figure this mystery out let me know. We dont want to be getting fleeced.

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