Q: For earning short term interest, in the past I have bought BA's and CP issued by Canadian Banks. I am now considering PSA and CASH.......which show better yields with lower buy/sell commissions. So - it seems like a no-brainer to put short term cash investments into PSA which shows an indicative yield of 5.5% - versus BA's CP or CASH. Am I missing anything here - does an investment in BA's or CP have advantages over buying PSA?? Does CASH have advantages over PSA despite the lower yield??
Thanks
Thanks
5i Research Answer:
We do not think anything is being missed. It all comes down to rates. The high interest ETFs will have variable returns based on short term yields whereas other securities can be at fixed rates, at least until maturity. We would consider CASH and PSA essentially equivalent.
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in PSA.