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Exploring HISA funds: a smart addition to your investment portfolio

We all want to secure our savings while earning a competitive return, but what’s the best way to do it? One option gaining traction among Canadian investors is the High Interest Savings Account Fund (HISA). But what exactly is a HISA fund, and why might it be a smart choice for your investment portfolio? Let's break it down.

In this article, we’ll cover:

  • What is a HISA fund?
  • HISA mutual funds
  • HISA ETFs
  • Why consider a HISA?

So, what is a HISA Fund?

A HISA fund is a cash solution available to retail investors that provides access to high-interest deposit accounts denominated in Canadian and U.S. dollars. These funds come in two versions—Exchange Traded Fund (ETF) and mutual fund (Class F)—and allow investors to invest capital in multiple high-interest savings accounts at various banks and other financial institutions.

If you’re looking for something to deliver solid returns while maintaining a low-risk profile, a HISA fund is a good option to consider.

Why consider a HISA Fund?

Here are some reasons why you might want to include a HISA fund in your investment portfolio:

Exposure to high-interest deposit accounts

A HISA fund allows you to tap into the benefits of high-interest savings accounts without needing to manage these accounts individually. It's a hassle-free way to earn interest on your deposits.

Liquidity and flexibility

If you're looking for a short-term investment, a HISA fund offers liquidity. You can access your funds without any penalties (applicable trading fees may apply), making it suitable for those who may need to dip into their savings frequently.

Regular cash flow

Investors seeking regular income will appreciate the potential for monthly cash flows from HISA funds. While returns may not rival other high-yield investments, they provide the benefit of steady cash inflows.

Low-risk tolerance

HISA funds are ideal for conservative investors who prefer to minimize risks. These funds invest in stable, high-interest deposit accounts, which makes them a relatively safe investment compared to stocks or other high-volatility assets. Some are also insured by the CDIC, CUDIC, or FSRA, adding additional security to your investment.

HISA Mutual Funds

A HISA mutual fund (Class F) is an investment vehicle that pools the capital from multiple investors to invest in high-interest savings accounts across various cash deposit vehicles. This collective approach enables retail investors to benefit from higher interest rates and better terms than they might obtain individually. One of the key advantages of a HISA mutual fund is its simplicity and ease of access, making it an ideal choice for those looking for a straightforward and low-risk investment option. Additionally, HISA mutual funds often come with lower or no management fees than other mutual fund categories, ensuring that more of the interest earned remains in the hands of the investor.

It's worth noting that only F Class funds or no trailer fee paying versions can be bought at Qtrade. You can find a complete list of the HISA funds we offer here.

How to choose a mutual fund
Read more

HISA ETFs

A HISA ETF operates on a similar principle to a HISA mutual fund but offers extra liquidity and flexibility that can be particularly appealing to investors. However, unlike some of the mutual funds we mentioned earlier, they are not covered by CDIC, CUDIC, or FISA. As a listed product on the stock exchange, a HISA ETF can be easily bought and sold like any other stock, allowing investors to adjust their positions in response to market changes quickly.

HISA ETFs are also known for their transparency, with real-time pricing and holdings information readily available, which can provide peace of mind and a greater sense of control over one's investments. Given their typically low management expense ratios, HISA ETFs are attractive for those looking to maximize their returns while keeping costs minimal. Qtrade offers over 100 free ETFs to buy and sell, with no minimums.

Investing in a HISA fund can be a strategic move to enhance your financial portfolio. By diversifying your investments with low-risk options, you position yourself for potential growth while maintaining liquidity.

Are you ready to explore HISA funds further? Don't hesitate—log in to your Qtrade account and start investing today! Your financial future awaits.

Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. Qtrade and Qtrade Direct Investing are trade names or trademarks of Aviso Wealth Inc. and/or its affiliates.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds, other securities and cash balances are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated.

The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes, and it is not intended to provide specific advice including, without limitation, investment, financial, tax or similar matters.

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