Alternatives to cash in a SIPP

[woody1]

My provider currently pays 2% which is not great but then the base rate is only 3.75% and at least they don't charge fees on cash.

Obviously there are money market funds but do they pay much better? There are even money market ETFs eg. HGBP, CSH2.

There are also ultrashort bond ETFs which offer a cash-like return eg. ERAN.

There are also "buffer ETFs" (similar to capital-protected structured products) which provide a return linked to an index like the S&P but limit, or even eliminate, any downside.

I used to quite like ZDPs which, although not risk-free, were a very low risk way of achieving reasonable capital growth, although there aren't many around these days.

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Anything else, with a cash-like return, worth considering?

Thanks.

[56samba]

I just dump cash into vanguard sterling short term MM income, works out it pays about 4% pa currently, monthly.

[Dorkeaux]

If you don't know what you are doing in terms of investment and stock picking (almost no one does) ETFs are a much better than anuities, cash or random stock picks IMO.

You still have to make decisions, though.
And understand what you are doing.

You can buy ETFs that focus on whole markets (eg S&P, FTSE) or segments of markets (top 100, commodities etc.) or cross-market (world-wide high dividend for example).

I am not advising you, financially. You have to do your own research.
And think about your appetite for reward vs risk.
Even ETFs are volatile, so calmness is a virtue. You have to believe the area in which the ETF operates will increase over your timeframe.

The last couple of years have produced good returns, generally. But in the short term future there is always a chance it could go to worms (Trump, cough cough..).

Good luck.

[northernladuk]

I just dump cash into vanguard sterling short term MM income, works out it pays about 4% currently, monthly.

Monthly?

[willendure]

There is a whole spectrum of fixed income products from low to high risk - anything over 7 or 8% is higher risk.

You could buy a mix of funds specializing in corporate debt, real estate, financials. Even during 2008 these funds might have traded at a discount, but almost all still kept paying the interest. This is generally the fixed income area that you would base a pension in drawdown mode in.

Avoid CLOs maybe - collateralized loan funds, which are funds structured like CDOs of 2008 infamy, but in corporate loans, not mortgages. They usually have higher return 10, 11% or more. Recent private credit market issues suggest the CLOs might be headed the same way.

Why not stick some in a physical gold ETF? Gold is money too.

Just remember you are not growing your capital unless you are getting a return higher than inflation (and I mean real inflation not the CPI shifting goal post).