Friday, May 19, 2023

Short Takes: InvestorLine’s HISAs, 24-Hour Trading, and more

I recently moved some cash into BMO InvestorLine’s high-interest savings accounts (HISAs) that are structured as mutual funds.  Their designations are BMT104, BMT109, and BMT114, and they purportedly pay 4.35% annual interest (which they can change whenever they like).  However, the way they report the monthly interest payments is so baffling that I wasn’t able to sort it out in my first 15 minutes of trying.  A further complication is the following text in the HISA description: “The Bank may pay, monthly or quarterly, compensation to your Dealer at an annual rate of up to 0.25% of the daily closing balance in the BMO HISA.”  I couldn’t find any evidence of such a charge, but I haven’t been invested for a full quarter, and I can’t yet say that such a charge isn’t buried somehow in the confusing reporting.  I have more digging to do before I can recommend these HISAs.

Here are some short takes and some weekend reading:

Preet Banerjee explains the dangers of Robinhood’s new 24-hour stock trading.  “If you don’t know the difference between market orders and limit orders, you’ll lose your shirt in extended hours trading.”

Justin Bender compares the all-equity exchange-traded funds XEQT and VEQT.

9 comments:

  1. What is your opinion on ETF based HISA like Horizons CASH.TO?

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    1. The yield of CASH looks good, but I couldn't find any mention of CDIC coverage.

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  2. They are not insured according to this article by PWL https://www.pwlcapital.com/high-interest-savings-account-etfs/#:~:text=HISA%20ETFs%20are%20not%20insured%20by%20the%20CDIC would that be a deal breaker?

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    1. Whether or not it's a deal breaker for me depends on what other protections may be in place. The solution I'm trying right now at InvestorLine does have CDIC protection, and I can get access to cash the next day, rather than waiting for the proceeds of an ETF sale.

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  3. I'm using a similar HISA offered by Scotia. I can report that I'm receiving the published 4.50% rate on DYN6004. According to their rate sheet deposits are covered up to the CDIC limit. I would assume that BMO is a similar offering. https://ads.scotiabank.com/ADS/Download/980/en

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    1. Yes, BMO's appears to be similar, but I like to check the details.

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  4. I use an ETF called ZPAY from BMO to park some of my cash component of my portfolio. Sorry late to this party, catching up on old mails...

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    1. ZPAY invests in US equities. How does this qualify as cash?

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    2. I look at this CC ETF as returning about a 6% distribution every month while it has very little volatility. If I can purchase an ETF for $30.00 hold it and collect 6% a month (after the MER) then sell it for approximately the same $30,00 later, for me it's better than parking it in a bank or laddering CD's. Sorry did not explain how i utilize this ETF before.

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