HSAV vs CASH.TO: Comparing High-Interest Savings ETFs

Guy on mobile phone checking HSAV price
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The main difference between HSAV and CASH.TO is that HSAV generates modest capital appreciation without any distributions while CASH.TO is focused on capital preservation and providing monthly distributions to unitholders. 

Horizons Cash Maximizer ETF (HSAV) is an ETF designed to provide investors with higher yields than traditional savings accounts, while maintaining liquidity and preserving capital.

This ETF offers a way to earn competitive interest rates on your cash holdings, making it suitable for those seeking short-term investment strategies.

On the other hand, the Horizons High Interest Savings ETF (CASH.TO) is an ETF option that focuses on providing exposure to high-interest savings accounts from various Canadian financial institutions.

This ETF allows investors to benefit from competitive interest rates while maintaining the benefits of liquidity and accessibility.

Overview of Horizons Cash Maximizer ETF (HSAV)

The Horizons Cash Maximizer ETF (HSAV) is a popular investment launched in Canada in 2019.

This ETF aims to provide investors with a competitive rate of interest on their cash holdings, while also providing liquidity and preserving capital.

HSAV allows you to park cash and generate income higher than traditional savings accounts or money market funds.

Investors benefit from the competitive yield offered by HSAV, enhancing overall investment returns.

HSAV is designed for those seeking stability and security for their cash investments.

Compared to traditional high-interest savings accounts, HSAV should offer a higher yield. 

The Horizons Cash Maximizer ETF has gained significant popularity among Canadian investors.

Performance of HSAV

HSAV has consistently delivered impressive returns to investors over the past year.

With its competitive yield and low management fees, HSAV has consistently outperformed many other similar investment options.

HSAV boasts a low risk profile.

Its investment strategy primarily focuses on high-quality, short-term fixed income securities, ensuring stability and minimizing potential losses.

HSAV provides excellent cash access.

Investors have the flexibility and liquidity to easily buy and sell shares of HSAV on major stock exchanges.

The recent performance of HSAV makes it an attractive investment choice for individuals seeking consistent returns and stability.

Return 6-month YTD 1-yr. 3-yr. Since inception
HSAV 2.65% 4.25% 4.98% 2.42% 2.11%

As of October 31, 2023

Features and Benefits of HSAV

HSAV aims to provide investors with high interest rates by investing primarily in cash equivalents, such as high-quality, short-term fixed income securities.

This strategy can result in higher returns compared to traditional savings accounts.

Another advantage of HSAV is its liquidity.

Investors have the flexibility to buy or sell shares on any business day at net asset value.

This daily liquidity allows investors to have quick access to their funds whenever needed.

Diversification is another key feature of HSAV.

By investing in a diversified portfolio of cash equivalents, the risk associated with investing all funds in a single entity is reduced.

This diversification provides stability and helps protect against market fluctuations.

HSAV also prioritizes transparency.

It publishes its holdings daily, ensuring that investors have access to information about the underlying securities held in the fund. 

Furthermore, HSAV stands out due to its low fees.

Compared to traditional mutual funds, HSAV has a low management fee of 0.18%.

Overview of Horizons High Interest Savings ETF (CASH.TO)

CASH.TO is a financial product in Canada that provides investors with a high level of interest income.

It’s important to note that while the ETF aims to maintain a stable net asset value (NAV) of $10 per share, it is subject to market fluctuations.

CASH.TO is a suitable option for low-risk investment strategies.

It primarily invests in high-quality, short-term fixed-income securities, reducing the risk of default and market volatility.

Performance of CASH.TO

When evaluating the performance and returns of CASH.TO, it is important to consider key metrics and historical data.

CASH.TO consistently delivers strong returns with an average annual gross yield of 5.29% as of November 17, 2023.

The fund provides investors with a steady and reliable passive income stream through monthly dividends.

Annualized distribution yield as of November 17, 2023 was 5.36%.

Effectively this means that all earned interest is paid out as shareholder dividends.

CASH.TO also has a low management expense ratio of 0.11%, ensuring that a greater percentage of the fund’s returns goes to investors.

This makes it a cost-effective option for individuals looking to invest.

Features and Benefits of CASH.TO

High Interest Savings ETFs offer a range of features and benefits that make them an attractive option for investors.

One of the main advantages is the higher interest rates they provide compared to traditional savings accounts.

This allows investors to earn a higher return on their investment.

In addition to the potential for higher interest rates, CASH.TO is also liquid.

This means that investors can easily access their funds by buying and selling on the stock exchange.

This flexibility allows for quick and convenient transactions, ensuring that investors can make the most of their investment opportunities.

Investing in a CASH.TO also allows for portfolio diversification.

By including these ETFs in a portfolio, investors can reduce risk by spreading their investments across different assets.

High-quality, interest-bearing securities are utilized in these ETFs, which further enhances their risk-reducing qualities.

CASH.TO is considered low risk.

This is primarily because its invested in cash, cash equivalents, and high-quality fixed-income products.

These investments provide a stable foundation for the ETFs, minimizing the potential for significant losses.

Another advantage of CASH.TO is that it’s passively managed.

This means that they aim to replicate the performance of a specific index and keep costs low.

By avoiding active management strategies, these ETFs can offer competitive returns with minimal expenses.

Risks to Consider When Investing in HSAV and CASH.TO

Market volatility: ETFs are susceptible to market fluctuations, and their value can increase or decrease based on the performance of the underlying securities they track.

This exposes investors to the risk of potential losses.

Diversification: ETFs usually hold a diversified basket of securities, which helps to spread the risk.

There is still a risk associated with underperforming securities or specific risks.

Tracking error: ETFs strive to replicate the performance of an index or a specific asset class.

There may be deviations from the actual performance due to tracking errors.

These errors can occur due to fees, liquidity, and market conditions.

Liquidity risk: Certain ETFs may have lower trading volumes, resulting in lower liquidity.

This can impact the ease of buying or selling shares and may lead to higher trading costs.

Total cost of ownership: ETFs have management fees and other expenses that should be considered.

These costs can diminish overall returns and should be accounted for when assessing the potential risk-reward ratio.

Frequently Asked Questions

  • What is the difference between HSAV and CASH.TO?
  • What is the difference in liquidity between HSAV.TO and other high-interest savings vehicles?
  • HSAV.TO offers daily liquidity, allowing investors to buy or sell anytime throughout the trading day. This is an advantage compared to other high-interest savings vehicles that may have minimum holding periods or investment amounts.

  • What are the risk profiles of HSAV.TO and CASH.TO?
  • HSAV.TO has a low risk profile compared to other high-interest savings ETFs in Canada. On the other hand, CASH.TO is considered a better performing ETF. It’s important to carefully consider your risk tolerance before investing in any ETF.

  • Are there any investment minimums or lock-up periods for HSAV.TO or CASH.TO?
  • HSAV.TO and CASH.TO do not have any investment minimums or lock-up periods. Investors are free to buy or sell units of these ETFs as desired.

  • What are the recent fee adjustments made for HSAV and CASH?
  • The management charge for CASH has been reduced from 0.14% to 0.10%, while the rebate on HSAV’s annual management fee has been eliminated. This adjustment was made in response to recent increases in the gross yields of the ETFs.

Harshil Dhanky

Harshil Dhanky is a financial services professional based out of Toronto, Ontario with extensive experience in the Canadian banking industry across Toronto, Calgary, and Vancouver in the capital markets, asset management, and lending sectors.

In the past, Harshil has worked with a range of consumer lending websites, personal finance advisors, investment managers, insurance companies, and other financial institutions to write and edit whitepapers, articles, blog posts, and other collateral read by consumer audiences to help them make better financial decisions.

His work spans a wide range of Canadian personal finance topics including savings and retirement programs, debt management tips, mortgages and personal loans, and other key financial issues for Canadian consumers at each stage of their life.
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