Is the CASH.TO ETF Safe to Invest In? Here Are 4 Factors to Consider.

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CASH.TO is a High Interest Savings ETF from Horizons ETFs with a 5.37% yield that are paid monthly. But, since it is not CDIC-insured like a GIC, it brings the question, how safe is it to invest in it?

Is the CASH.TO ETF Safe to Invest In? Here Are 4 Factors to Consider.

Before we go into the 4 factors to look at to assess the riskiness level of CASH.TO as an ETF, let's take a quick look at the returns and benefits from investing in it.

How Much You Can Earn from CASH.TO

I have invested in CASH.TO myself, and based on my calculation between January 2023 to October 2023, here is what I earned:

For every $1,000 invested in CASH.TO, I earned an average of around $4.24 per month, or around $50.93 (if calculated annually).

This averages to a yield of around 5.09% in my case for the 10 months.


Starting October 19th, 2023, the yield of CASH.TO has been adjusted up to 5.40% (from 5.39% previously).

So this means if someone were to invest $10,000 into the ETF, they would earn around $45 per month.

Over the past year, the yield of CASH.TO has been going on an upwards trend, considering how banks have been progressively increasing their deposit interest rates in response to Bank of Canada interest hikes. In 2023, Bank of Canada has raised its key interest rate 10 times—the last hike on July 12th, 2023 brought it up to 5.00%, the highest it has been in 22 years. 

Here's a screenshot from Horizon ETF's website that shows the latest yield of CASH.TO:

CASH.TO Gross Yield as of October 19th, 2023
Source: Horizons ETFs (November 2023)

The Biggest Benefit of CASH.TO

Aside from its high yield rate when compared to GIC rates offered in many Canadian banks, CASH.TO provides liquidity, meaning you can sell the ETF and turn it into cash relatively quickly.

If you were to put your money in a GIC to earn >5–6% interest, chances are your funds would have to be locked up for at least a few months before you can access it.

With CASH.TO, you are earning comparable interest rates and yet, you can technically sell the ETFs any time the stock market is open. Of course, to access the funds in cash, you will have to wait for your broker's holding period, and how long it takes for your broker to transfer the funds to your bank account, but this entire process shouldn't take longer than a week.

4 Factors to Consider about the Risk of Investing in CASH.TO

Now, let's take a look at how risky it is to invest in CASH.TO.

1. Risk in Terms of Holdings

Projected Risk: Very Low

As of November 9th, 2023, CASH.TO deposits over $3.98 billion from investors in 3 of Canada's Big 6 Banks, namely:

National Bank ± 49% ± $1.95 billion
CIBC ± 33% ± $1.30 billion
Scotiabank ± 18% ± 730 million

These are amongst Canada's largest banks and it's probably safe to say they are unlikely to fail (or be allowed to fail). So if we were to look at the risk factor of CASH.TO based on its holdings alone, the risk of the ETF becoming insolvent is relatively very low.

2. Risk in Terms of CDIC Insurance

Projected Risk: Low

CDIC (Canadian Deposit Insurance Corporation) is an insurance by the government to protect your money in CDIC member banks. All major banks in Canada are CDIC-insured, and this insurance covers up to $100,000 in standard chequing and savings accounts, as well as GICs. This means that if a CDIC-insured bank goes under, customer deposits in accounts up to $100,000 will remain protected.

Like all other ETFs, CASH.TO is not insured by CDIC. Even so, this is unlikely to be an issue because it comes back to the confidence Canadians have towards the 3 of the Big 6 Banks. They're unlikely to fail, and so the fact that investments in CASH.TO aren't CDIC-insured does not seem to be a huge deterrent for $3+ billion worth of investors.

Fun Fact: The last time CDIC had to pay out Canadian depositors due to a bank failure was around 27 years ago, back in 1996.

3. Risk in Terms of Management

Risk: Low to Unknown

CASH.TO is managed by Horizons ETFs Management Inc., the 4th largest ETF provider in Canada with over $27 billion in assets in 119 funds as of October 2023 (source). 

With its size and assets under management, Horizons ETFs Management Inc. appears to be a relatively reputable company, but like all companies, there is always an unknown element at play.

There is a possibility that the CASH.TO could be discontinued, or if the company ceases to operate. If the company ceases to operate, the assets under management would likely be taken over by another investment firm. In this case, investors would still remain protected. 

4. Risk in Terms of Law and Regulation

Risk: Low / Medium to Unknown

The OSFI (Office of the Superintendent of Financial Institution) is tasked to ensure public confidence in the Canadian financial system.

In May 2023, it was reported that OSFI is currently reviewing High Interest Savings Account (HISA) ETFs such as CASH.TO, and it's possible that everything could remain as it is, or there may be changes coming.

OSFI does not technically have "jurisdiction" over the existence of HISA ETFs, but they can instruct or influence banks to lower interest rates offered to the funds deposited from HISA ETFs.

The reason why OSFI is reviewing HISA ETFs is because it can impact the operation of the banks where investor funds are deposited.

To oversimplify it, think about this: HISA ETFs are deposited as large sums of money at a number of Canadian banks (in hundreds of millions to the billions of dollars).

  1. If a large number of investors were to sell their HISA ETFs at around the same time, and/or
  2. If the management of these HISA ETFs were to move these amount of funds from one Canadian bank to another on a whim for any reason,

both of these situations may then cause an effect similar to a bank run.

So, should this be regulated to prevent that? You may have confidence in the management decision in one or a few firms, but what about the rest? There are numerous investment firms across Canada that offer HISA ETFs; Horizons is only one out of many. This is also what OSFI is evaluating.


On October 31st, 2023, OSFI has issued a ruling to how these HISA ETFs should be managed. Long story short, all Deposit-Taking Institutions (DTIs) must back all HISA ETF balances that can be withdrawn within 30 days with other high quality liquid assets, such as government bonds.

This appears to be a logical ruling, as it mitigates the two risks described above. However, there is now a rumour (or perhaps a prediction) that the yields offered by these HISA ETFs will likely drop by 0.5% annually according to TD Securities. Still, it is unclear whether this will definitely happen as the OSFI ruling does not go into effect until January 31st, 2024. Until then, everything else is speculation.

Over and Out

At the moment, CASH.TO does seem like an attractive option for everyday investors who are looking for a decent monthly return while maintaining liquidity. It is relatively very low in terms of foreseeable risk, as its performance is highly tied to 3 of the Big 6 Banks in Canada, and it is unlikely that these banks will (be allowed to) fail.

Considering the ruling issued from OSFI, the question now lies in whether HISA ETFs will actually end up paying out lower yields to investors in the near future. There is a speculation that it will, but none are guaranteed to happen... yet.

As of now, CASH.TO appears to be a safe play, but like all other investments, they are never 100% risk-free. It's always a good idea to diversify your investments.

Historical Information

Holdings November 9th, 2023 August 21st, 2023 Mid-July 2023 Early June 2023
CASH.TO Gross Yield Rate 5.40% 5.39% 5.41% 4.93%
CASH.TO Total Net Assets ± $3.98 billion ± $3.24 billion ± 2.89 billion ± 2.61 billion
Holdings at National Bank ± 49% (± $1.95 billion) ± 48% (± $1.57 billion) ± 47% (± $1.37 billion) ± 47% (± $1.23 billion)
Holdings at CIBC ± 33% (± $1.30 billion) ± 36% (± $1.05 billion) ± 36% (± $1.05 billion) ± 40% (± $1.04 billion)
Holdings at Scotiabank ± 18% (± $730 million) ± 19% (± 629 million) ± 16% (± 468 million) ± 13% (± $329 million)

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