Q: I have some cash parked in HSAV and noticed that, for the past month, the trading there follows the same pattern, the price is up during the morning and mid-day and then drops at the end of the day. As a result, the price remained practically the same for the past month and the difference between the NAV and price is now down to only 20c. I am wondering what's going on with this ETF? Looks like some investors are doing massive selling there, do they know something I don't? Is HSAV is still you preferred "cash parking" ETF for people in high-tax bracket?
5i Research Answer:
We would not necessarily find it over constructive to monitor daily trading of a cash ETF so closely. Such activity could be as simple as the market maker getting a slower start to the day, so early buyers have to buy in the market rather than see new units created. Or, it could in fact be a large buyer in the AM followed by a large seller in the afternoon. But there is absolutely no way of knowing, so the exercise is futile. Units are prettyy much exactly the same price as they were a month ago (3-cent difference). We would consider the shrinking of the premium very positive for new buyers and would still consider it quite attractive for cash parking and tax deferral.