is there any way to invest foreign currency in the UK?

noClue

"So you are currently holding USD in a multicurrency account, and you want to "invest in USD directly"? " - yes

yes, i will leave them there for the time being as we all know these days equity is a bit too bumpy even long term duration bond sold off lol, so I am asking for the (hopefully near) future... Is that why you suggested short-dated us treasuries etf for now?

I have a freetrade account, never used it after sold 2 free stocks lol. I didn't know they can let you directly invest in USD?

masonic

noClue said:

"So you are currently holding USD in a multicurrency account, and you want to "invest in USD directly"? " - yes

yes, i will leave them there for the time being as we all know these days equity is a bit too bumpy even long term duration bond sold off lol, so I am asking for the (hopefully near) future... Is that why you suggested short-dated us treasuries etf for now?

I have a freetrade account, never used it after sold 2 free stocks lol. I didn't know they can let you directly invest in USD?

Equities can be considered independent of currency because (crudely) they are taking things with intrinsic value, doing work on them and generating a return from that. If a particular currency strengthens or weakens, then companies will eventually feed that on to their customers paying in that currency. Many companies sell their goods and services globally, so the country in which their shares happen to trade may be irrelevant.

I suggested a short-dated treasuries ETF as it is the most cash-like option that would give you USD currency exposure through an investment. You won't get much of a return, so for a long term investment, you'd be better off in equities or a mixture of asset classes.

Freetrade allows you to purchase most ETFs and investment trusts, so you can get exposure to bonds, gold, diversified funds etc as well as trading individual shares.

pjread

I think it's a bit unclear to me what the objective is.

1/ to hold on to USD cash or equivalent (as savings - e.g. in a bank account)

2/ to invest in shares, bonds, index funds or something else similar to these

if it's #2, you might be overthinking the importance of what currency you buy with

wmb194

pjread said:

I think it's a bit unclear to me what the objective is.

1/ to hold on to USD cash or equivalent (as savings - e.g. in a bank account)

2/ to invest in shares, bonds, index funds or something else similar to these

if it's #2, you might be overthinking the importance of what currency you buy with

The importance of #2 is if you don't want to have to keep paying fx conversion fees every time you buy and sell as you will with most UK brokers if you want to e.g., buy and sell shares listed in New York. Of course the benefit will depend on how frequently the OP expects to buy and sell.

pjread

wmb194 said:

pjread said:

I think it's a bit unclear to me what the objective is.

1/ to hold on to USD cash or equivalent (as savings - e.g. in a bank account)

2/ to invest in shares, bonds, index funds or something else similar to these

if it's #2, you might be overthinking the importance of what currency you buy with

The importance of #2 is if you don't want to have to keep paying fx conversion fees every time you buy and sell as you will with most UK brokers if you want to e.g., buy and sell shares listed in New York. Of course the benefit will depend on how frequently the OP expects to buy and sell.

Yeah I suppose so, but this sounds one-off with a single lump sum

noClue

I hear you guys, I might indeed "be overthinking the importance of what currency you buy with".... yes, it's one-off and im an iweb guy iykwim

I thought if there is a broker who will let me directly invest in USD so i don't have to pay fx conversion fees?

so yeah the goal is #2 to invest in global equity/bond etf/fund...

I think now i might as well exchange them back to gbp first.... is it a good time (not really a question)?

masonic

noClue said:

I thought if there is a broker who will let me directly invest in USD so i don't have to pay fx conversion fees?

What do you mean by "invest in USD"? USD is a currency, not an investment. Holding money in USD is as simple as having a cash balance in USD, which you can get using a multi-currency account. You've previously stated that the money you wish to "invest in USD" is currently held in USD, so no action is required to keep it in USD. You can keep it in your multi-currency account in USD until you are ready to transfer it to your broker and invest it. Whatever you do, it will have to be paid into your broker in GBP, but there is a plethora of investments that have no exposure to GBP but can be bought using GBP without converting it to another currency.

wmb194

masonic said:

noClue said:

I thought if there is a broker who will let me directly invest in USD so i don't have to pay fx conversion fees?

Whatever you do, it will have to be paid into your broker in GBP...

Not with e.g., Fineco or a US broker if you can make a direct transfer in USD.

With the OP essentially asking the same questions again it feels like we're beginning to go in circles.

noClue

yes thanks both, I was thinking of "make a direct transfer in USD" so no exchange fee

but now some of you mentioned long term wise exchange rate doesn't really matter which is a very good point, so now I'm thinking I might as well exchange it into gbp and invest as usual

so yeah I got my answers here cheers!

bd10

There are two easy ways to convert GBP into USD, both relatively cheap:

(a) Buy a US money market fund - ideally floating rate in this environment - whereby the issuer offers GBP denominated units (either as OEIC or ETF). That way you end up only paying a fixed dealing fee (plus bid/ask if ETF) whereas the fund manager hedges the currency for the GBP shares, so you de facto have a USD money market account with your UK-based SIPP/ISA/etc provider.

(b) Open an investment account with Interactive Brokers. The base CCY would be GBP but they let you convert into any other CCY at quite decent rates.