What I gathered from this is:It's discussed in more detail here
I am assuming you know what an "overnight rate swap ETF" *is*?
Under what circumstances would it exhibit large volatility in NAV ie subject you to a possible capital loss.
viewtopic.php?p=7749840#p7749840
and here is an example of one
https://www.justetf.com/uk/etf-profile. ... 1230136894
The interest is paid each day. If the interest rate were for some reason to become negative this is the only way a capital gain loss would occur.
In this case the holder could sell their holdings when a negative rate is announced, if they so wish.The country of retirement will most likely be Poland. With the PLN not considered a major currency, I would feel better served having my safe holdings in one or all of the 3 main major currencies.why gbp and usd? where do you expect (or are more likely) to retire? that should be the currency of choice.
- replication via swaps. So that's another layer of risk, but hopefully a very small one
- I haven't read the Risk Factors for this fund - in the Prospectus. Have you?
Since yield curves are normally upwards sloping, I would rather have a cash fund like this only be c 5% of my portfolio at most. My preference would be for a bond fund. Assuming I had 1 year of living expenses in cash or cash-like investments.
Statistics: Posted by Valuethinker — Mon Nov 11, 2024 4:55 am — Replies 11 — Views 2075