Park your cash in low-risk investments

Xtrackers $ Fed Rate Tracker (Acc.) - $XFFE

This passively managed money market fund is an exchange-traded fund (ETF). It aims to track the Federal Funds rate. This is the interest rate that US commercial banks charge each other for any overnight loans of their funds.

Essentially, this ETF is attempting to provide you with that same level of return, with any of its interest reinvested daily.

Lyxor £ Overnight Return (Acc.) - £CSH2

This actively-managed ETF aims to achieve short-term returns higher than SONIA, while offering low risk and low volatility.

Who’s this SONIA, you ask?

Well, the better question might be what is SONIA.

SONIA stands for ‘Sterling Overnight Index Average’ and it's the rate UK banks lend money to each other overnight (similar to the Fed Funds rate in the US, mentioned above).

Any income received by the fund is reinvested into the fund itself.

Lyxor $ Overnight Return (Acc.) - $SMTC

This money market fund aims to achieve short-term returns higher than the US Fed Funds rate.

It attempts to do so by investing in a portfolio of low-risk financial instruments and repurchase agreements (like debt). Any income received by the fund is reinvested.

Xtrackers £ SONIA tracker (Dist.) - £XSTR

This ETF seeks to track SONIA (remember that interest rate we discussed above)?

It tries to replicate SONIA’s performance with a swap.

A swap is a financial agreement between two parties to exchange something. A swap is often used to manage risks or change interest rate terms. For example, one party may agree to pay a fixed interest rate in exchange for receiving a variable interest rate from the other party.

This fund aims to generate income while preserving and growing the original investment. Income received is distributed.

Lyxor $ Fed Rate Tracker (Acc.) - £FEDG

This passively managed ETF tracks the Fed Funds rate. Just like XSTR, FEDG tries to duplicate the Fed Funds rate with swaps.

Basically, it attempts to mimic the performance of a deposit if it were to earn the Fed Funds rate, with any interest being reinvested daily.

PIMCO £ Short Term Bonds (Dist.) - £QUID

Here’s another actively-managed ETF on the list. PIMCO’s money market fund invests in a diversified portfolio of GBP-denominated fixed-income securities, like government and corporate bonds.

As for any securities QUID invests in, these will all be ‘investment-grade’, which means they're considered lower risk. Though, they’d likely still be deemed higher risk than government debt, for comparison.

QUID’s investments all have relatively shorter maturities. Meaning, the debt it holds has an average maturity of less than one year, up to a maximum of three years. Shorter maturities mean that any debt it holds won’t last very long before being repaid. The shorter any debt’s duration is, the less likely it is to be affected by changes in interest rates.

This fund aims to generate income while preserving and growing your original investment. If it generates income, this will be distributed.

PIMCO $ Short Term Bonds (Dist.) - $MINT

Think of MINT as QUID’s American cousin. So instead of investing in UK-backed debt, MINT invests in US Dollar fixed-income securities.

It’s an actively managed ETF, and it also only invests in investment-grade securities with shorter maturities.

Similarly, this money market fund looks to create income while preserving and growing your original investment. Any income received is distributed.