Do you want the highest return on your investing cash, or the most safety?

High interest savings account ETFs have peaked as an investing phenomenon, but they still have something to offer people with cash to park safely.

Regulatory changes that took effect this year resulted in a decline of about 0.4 of a percentage point in the return from HISA exchange-traded funds. The term HISA reflects the fact that these funds hold their assets in savings accounts at big banks with much higher interest rates than retail customers get.

A HISA ETF might get you a yield of 4.8 per cent these days after fees, while a T-bill or money market ETF might offer 5.2 per cent. Yield chasers will no doubt lean to money market and T-bill funds, but there’s still a case for HISA ETFs.

“I think a lot of advisers and investors like the purity of HISA products,” said Raj Lala, president and CEO at Evolve ETFs. Evolve offers the Evolve High Interest Savings Account Fund (HISA-Cboe) and the Evolve Premium Cash Management Fund (MCAD-T), which is a money market fund.

Evolve’s HISA and the Horizons High Interest Savings ETF (CASH-T) are examples of HISA funds that keep all their assets in big bank savings accounts. These accounts do not benefit from deposit insurance, but they are backed by the solidity of big banks.

Mr. Lala said money market funds hold short-term borrowings from governments and corporations, which he thinks offer incrementally more risk than bank deposits. For example, a global financial crisis might affect the ability of a company to redeem securities held in a money market fund.

MCAD and other funds like it have a floor price on their units – the price rises through the month to reflect the coming interest payment and then falls back to the floor price post-distribution. It’s very unlikely, but not impossible, for the price to fall below the floor price in a crisis situation.

HISA ETFs units work similarly – unit prices rise through the month and then fall back to the floor price after the interest payment. The “purity” referred to by Mr. Lala reflects the fact that the underlying assets are simple bank accounts. A big bank failure cannot be dismissed as a possibility, but it’s the kind of thing that would happen only amid far greater disruption in the financial system.

Another reason why HISA ETFs have peaked is that we’re at, or very close to, the high point for interest rates. The Bank of Canada kept its benchmark overnight rate steady on Wednesday, but it’s expected to start cutting later in the year. Each reduction in the overnight rate will be reflected fully in the yield on HISA ETFs.

Investors pumped billions into HISA ETFs when rates were rising, but that’s over for now. Mr. Lala said about $450-million has flowed out of these funds since Feb. 1, about 2.5 per cent of total assets. He sees the outflows resulting at least as much from investors wanting to put money to work in the stock and bond markets as a reaction to falling yields.