Investing into Euros

srcandas

The pound is now buying 1.255 Euros. I can't see it returning to 1.30 so is now the time to drop a little into a fund in Euros?

Can anyone suggest any such funds that invest in big Corps in Europe? I like the idea that if the pound weakens later I could make a little extra on the currency? Sort of hedge

Even a Euro skeptic like me might like a little dabble

:beer:

Jegersmart

I am not sure that adding an additional risk component is desirable at the current time - but I know Fidelity has a number of funds denominated in EUR - and others ofc - google is your friend I gues..

GL

J

bowlhead99

srcandas wrote: »

pound is now buying 1.255 Euros. I can't see it returning to 1.30

No offence intended, but given the current state of markets in general and the well-known issues in Europe (and you remember it was 1.50, five years ago?) - you really "can't see" the Euro worsening by 3.6% ?? This seems pretty naive.

Still, this is not to say there can't be the value you're looking for over a reasonable timescale, and if you're looking to invest in a fund that buys company shares in the current markets, you probably aren't looking for instant gratification and hope to benefit from share performance in the longer term.

A simple low cost way of getting exposure to large European shares, excluding the UK, is to just put it in a tracker which tracks a 'Europe ex-UK' index.

An example would be iShares MSCI Europe ex-UK (IEUX). You can see their underlying holdings here http://uk.ishares.com/en/rc/products/IEUX/all-holdings/1341471600000/false

This is European listed/headquartered companies - you'll recognise some of the names - but not all of the biggest European non-UK shares are all in Euro countries, so there will be some swiss franc, danish kronor exposure too.

Also as you're probably aware, the type of company which makes it into a list of the most valuable listed European companies doesn't necessarily do all its business in the Eurozone - example InBev sells Budweiser to Americans, Nestle sells Kit-Kats to the British - so the revenues that lead to the profits which support these share prices include dollars, sterling, etc.

Hope this helps, good luck etc.

srcandas

bowlhead99 wrote: »

No offence intended, but given the current state of markets in general and the well-known issues in Europe (and you remember it was 1.50, five years ago?) - you really "can't see" the Euro worsening by 3.6% ?? This seems pretty naive.

Ah bowlhead how good it must feel to be so confident of your thinking that you can throw in accusations of naivety. How good to know that the pound will return to 1.50 Euros simply because it once happened and yet to know it cannot return to 1.05 Euros which is where it has been and where the UK government would like it to be.

And to know for certain that the outing of Greece at Christmas will not strength the remaining 16.

And to know that Euro based large corporates are all over priced and about to suffer falling profits (thus dividends).

Me I prefer a little hedge for a possible upside that as you say can take its time

:beer:

srcandas

Jegersmart wrote: »

I am not sure that adding an additional risk component is desirable at the current time - but I know Fidelity has a number of funds denominated in EUR - and others ofc - google is your friend I gues..

GL

J

Thanks Jegersmart but I was more looking for experience or research based comment. I know some regular members here have been having a nibble at European equities and would love to here the result of their research and to know if they were combining the Euro factor. After all if I follow them I can only do them good :beer:

bowlhead99

Hey, I didn't say I knew the Euro couldn't return to 1.05, or that it wouldn't improve if Greece left. This is all possible, and you're more than welcome to believe that it will happen.

The current weakness exists because the majority of the market aren't seeing it as particularly likely. Still, one man's fear is another man's opportunity to buy, and it takes two to make a market. So there is nothing wrong in your believing Euro will strengthen.

However, I stand by the fact that in a market which has, within the last 5 years that we watched, moved from 1.50 to 1.05 - in less than 18 months - and is now somewhere in the middle, moving daily: it is naive to say you can't see it moving 3-4%.

I'd be naive if I said I couldn't see it moving 10%, 15% up. Or down! We all have an opinion but we should not go into that opinion blinkered that the market has gone so far and is now destined to go the other way.

Markets are not stable. One year ago the rate was 1.11. Nine months ago it was 1.15. Six months ago it was 1.20. Yesterday lunchtime it was 1.255. Yesterday evening it was 1.26.

This website has plenty of people on here looking for advice now because at some point in the past they "couldn't see" house prices falling, sterling weakening, their job ending, mortgage interest rates rising, savings rates falling, credit card companies stopping you getting the 0% deals. Etc Etc. So when we see that little phrase, particularly when someone is looking for advice and ideas, it's only reasonable to give a little warning.

Jegersmart's "not sure it's desirable to add an additional risk component at the current time, but" is the tactful way of saying "have you considered this properly, if you have, this is what you could do".

My "it's naive to think it couldn't go where you can''t see it going" is a similar risk warning. Having said that, I then gave you details of an exchange traded fund investing on a tracking basis in Europe (non-UK) large-cap stocks, and even gave you a link to the detailed portfolio. I also wished you luck in your endeavours.

You can thank me, or not, but don't say I'm "throwing out accusations" rather than trying to help.

Best wishes

opinions4u

It amazes me that it's taken this long for the Euro to slide.

There is still more brown smelly stuff to hit the European fan. I'd avoid. But then I'm risk averse these days.

srcandas

bowlhead99 wrote: »

Hey, I didn't say ......................

Just didn't think naivety when dealing with investments is necessary but I'll get over it

But that said I think there are very strong arguments in both directions. Against a strong pound: The UK doesn't want a strong pound and is very well equipped to impact such.

And while I think it likely Greece will be booted out (by simply asking it to do the impossible) that will if anything leave the Euro stronger not weaker.

And I still think Europe's ability to offer no news as good news will be maintained for a while yet :cool:

Yes there are many arguments in the other direction and I accept that but my bet is for a Euro below 1.20 and big rich European companies continuing to strengthen their balance sheets.

But let us see. Sorry if I took a little offence to easily. Have a great weekend :beer:

ps By the way I should say a strong pound is great for me as I send money to Spain every month so I don't mind if I'm badly wrong

grey_gym_sock

investing in european company shares is very different from investing in the euro (i.e. a deposit account in euros). with the shares, it's the real value of their business that matters, not the price in euros.

european shares are also a more sensible investment than euros. deposits in other currencies are generally a bad idea unless you're going to move to another country and spend the money there. because they give you (on average) the usual the low returns of deposit accounts, without the usual stability. and it's very difficult to call how exchange rates will move.

the euro crisis may well get worse before it gets better. but market prices always (attempt to) anticipate future events. in the longer term, this could be a reasonable point to buy into european shares - providing you don't end up with too large a proportion of your shares in europe.

gadgetmind

grey_gym_sock wrote: »

european shares are also a more sensible investment than euros.

I hope so. Over the last few months/weeks I've picked up a few European Investment Trusts and even the odd European property company.

srcandas

grey_gym_sock wrote: »

investing in european company shares is very different from investing in the euro

Don't think anyone was suggesting investing in Euros grey gym sock.

Simply a matter of investments held in Euros and thus the impact a moving exchange rate would have. :beer: