Evolve Funds has unveiled a new actively managed ETF in Canada that seeks to maximize monthly income while preserving capital and liquidity by investing in high-interest deposit accounts.

The fund targets a gross yield of approximately 2.25%.

The Evolve High Interest Savings Account ETF (HISA CN) has listed on Aequitas NEO Exchange and comes with a management fee of 0.15%.

The fund is aimed at investors who need to hold cash in their portfolios and is designed to be a higher-yielding alternative to holding cash directly while maintaining the benefits of liquidity and flexibility through the ETF wrapper.

The ETF primarily invests in high-interest deposit accounts with Canadian chartered banks, credit unions, or trust companies. It may also hold high-quality, short-term (one year or less) debt including Canadian Treasury bills, agency securities, and bankers acceptances.

The fund targets a gross yield of approximately 2.25% and is set to make distributions on a monthly basis. This compares favourably with the one-year Canadian Treasury bill yield of 1.7% (data as of 26 November 2019).

Investors in the fund will also benefit from no lock-up period, meaning investors will have efficient access to their cash savings.

The fund will compete with ETFs offered by Purpose Investments and First Asset Investment Management.

The Purpose High Interest Savings ETF (PSA CN) is the largest with over C$2.3 billion in assets under management and similarly charges a management fee of 0.15%. It is currently yielding 2.15%.

The CI First Asset High Interest Savings ETF (CSAV CN) debuted in June 2019 and has already grown to nearly C$900m in assets under management. The fund has the cheapest management fee of 0.14% and is currently yielding 2.25%.