Distribution currency from ETFs

masonic

aroominyork said:

masonic said:

aroominyork said:

Does anyone know Interactive Investor's charging practice for forex? I hold PSRW which distributes (quarterly, annoyingly) in USD.

You can find the info here: https://www.ii.co.uk/our-charges

Thanks. So "The FX rate for currency conversion is based on the bid/offer exchange rate to which we apply a spread of up to +/- 1.50% at the time of execution." Is the bid/offer the mid-point, and if they apply a 1.5% spread does that mean that when converting frim USD to GBP you pay half of that, ie 0.75% from the mid-point?

The text you quoted states a spread of up to +/- 1.50%, so the spread is up to 3% and their margin is up to 1.5%.

If you clicked through to their more detailed explanation, you'll see "We can apply these reduced charges to standalone conversions that go through in one lump sum". I don't know if that means all of the customers whose dividend needs to be converted to GBP (such as those holding in S&S ISA) get the benefit of a reduced rate from pooling the conversion.

aroominyork

masonic said:

aroominyork said:

masonic said:

aroominyork said:

Does anyone know Interactive Investor's charging practice for forex? I hold PSRW which distributes (quarterly, annoyingly) in USD.

You can find the info here: https://www.ii.co.uk/our-charges

Thanks. So "The FX rate for currency conversion is based on the bid/offer exchange rate to which we apply a spread of up to +/- 1.50% at the time of execution." Is the bid/offer the mid-point, and if they apply a 1.5% spread does that mean that when converting frim USD to GBP you pay half of that, ie 0.75% from the mid-point?

The text you quoted states a spread of up to +/- 1.50%, so the spread is up to 3% and their margin is up to 1.5%.

If you clicked through to their more detailed explanation, you'll see "We can apply these reduced charges to standalone conversions that go through in one lump sum". I don't know if that means all of the customers whose dividend needs to be converted to GBP (such as those holding in S&S ISA) get the benefit of a reduced rate from pooling the conversion.

I last converted on 26/12 at $=£0.774431 when xe.com's chart shows a rate around 0.786 (a rough read) so I was charged c.1.5%.

Does the secnd part of your post mean there may be a mechanism for ii to automatically convert dividends to GBP (which I would prefer anyway) which might be at a lower rate? (I expect your answer will be "ask them".)

masonic

aroominyork said:

masonic said:

aroominyork said:

masonic said:

aroominyork said:

Does anyone know Interactive Investor's charging practice for forex? I hold PSRW which distributes (quarterly, annoyingly) in USD.

You can find the info here: https://www.ii.co.uk/our-charges

Thanks. So "The FX rate for currency conversion is based on the bid/offer exchange rate to which we apply a spread of up to +/- 1.50% at the time of execution." Is the bid/offer the mid-point, and if they apply a 1.5% spread does that mean that when converting frim USD to GBP you pay half of that, ie 0.75% from the mid-point?

The text you quoted states a spread of up to +/- 1.50%, so the spread is up to 3% and their margin is up to 1.5%.

If you clicked through to their more detailed explanation, you'll see "We can apply these reduced charges to standalone conversions that go through in one lump sum". I don't know if that means all of the customers whose dividend needs to be converted to GBP (such as those holding in S&S ISA) get the benefit of a reduced rate from pooling the conversion.

I last converted on 26/12 at $=£0.774431 when xe.com's chart shows a rate around 0.786 (a rough read) so I was charged c.1.5%.

Does the secnd part of your post mean there may be a mechanism for ii to automatically convert dividends to GBP (which I would prefer anyway) which might be at a lower rate? (I expect your answer will be "ask them".)

For ISAs they must convert them before crediting them to the account, as ISA rules prohibit the holding of foreign currency. For unwrapped/SIPP accounts, there is no requirement to do so, and investors may prefer to use the USD without conversion. You have correctly predicted my answer to whether they would let those investors who would like to convert automatically to set up some sort of instruction to have the conversion pooled.

george4064

masonic said:

GeoffTF said:

HL hosts the accumulating version of the fund FTWG:

https://www.hl.co.uk/shares/shares-search-results/i/invesco-ftse-all-world-ucits-etf-usd-dist

 Good spot, although I think you mean the distributing version. Which is even stranger, as that is much smaller. But the fact they offer one version may go some way to explaining the rejection.

This is very odd indeed, I hadn’t spotted that until you mentioned it.

Im yet to hear back from HL following my ‘polite challenge’ to their initial response on why they can’t add the FWRG ETF to their platform.

aroominyork

masonic said:

aroominyork said:

masonic said:

aroominyork said:

masonic said:

aroominyork said:

Does anyone know Interactive Investor's charging practice for forex? I hold PSRW which distributes (quarterly, annoyingly) in USD.

You can find the info here: https://www.ii.co.uk/our-charges

Thanks. So "The FX rate for currency conversion is based on the bid/offer exchange rate to which we apply a spread of up to +/- 1.50% at the time of execution." Is the bid/offer the mid-point, and if they apply a 1.5% spread does that mean that when converting frim USD to GBP you pay half of that, ie 0.75% from the mid-point?

The text you quoted states a spread of up to +/- 1.50%, so the spread is up to 3% and their margin is up to 1.5%.

If you clicked through to their more detailed explanation, you'll see "We can apply these reduced charges to standalone conversions that go through in one lump sum". I don't know if that means all of the customers whose dividend needs to be converted to GBP (such as those holding in S&S ISA) get the benefit of a reduced rate from pooling the conversion.

I last converted on 26/12 at $=£0.774431 when xe.com's chart shows a rate around 0.786 (a rough read) so I was charged c.1.5%.

Does the secnd part of your post mean there may be a mechanism for ii to automatically convert dividends to GBP (which I would prefer anyway) which might be at a lower rate? (I expect your answer will be "ask them".)

For ISAs they must convert them before crediting them to the account, as ISA rules prohibit the holding of foreign currency. For unwrapped/SIPP accounts, there is no requirement to do so, and investors may prefer to use the USD without conversion. You have correctly predicted my answer to whether they would let those investors who would like to convert automatically to set up some sort of instruction to have the conversion pooled.

I messaged ii and, unsurprisingly, they answered "As you hold PSRW in your SIPP Account, we will apply the full dividend amount in USD for the client to convert at a later time. When a client does a conversion, the funds are converted with a live exchange rate and our conversion margin rate applied to it." Seeing ii profit from such forex transactions sticks in my craw a little, but not as much as PokerStars where there is about 6% between USD rates when converting from Sterling (for deposting) and withdrawing (if funds build up after winning), and then you hit another losing streak and re-deposit and so it goes round and round.

george4064

george4064 said:

masonic said:

GeoffTF said:

HL hosts the accumulating version of the fund FTWG:

https://www.hl.co.uk/shares/shares-search-results/i/invesco-ftse-all-world-ucits-etf-usd-dist

 Good spot, although I think you mean the distributing version. Which is even stranger, as that is much smaller. But the fact they offer one version may go some way to explaining the rejection.

This is very odd indeed, I hadn’t spotted that until you mentioned it.

Im yet to hear back from HL following my ‘polite challenge’ to their initial response on why they can’t add the FWRG ETF to their platform.

Still no response, but I noticed today that FWRG ETF is now available with HL. Guess they managed to get round the settlement issue they used as a poor excuse earlier..

masonic

george4064 said:

george4064 said:

masonic said:

GeoffTF said:

HL hosts the accumulating version of the fund FTWG:

https://www.hl.co.uk/shares/shares-search-results/i/invesco-ftse-all-world-ucits-etf-usd-dist

 Good spot, although I think you mean the distributing version. Which is even stranger, as that is much smaller. But the fact they offer one version may go some way to explaining the rejection.

This is very odd indeed, I hadn’t spotted that until you mentioned it.

Im yet to hear back from HL following my ‘polite challenge’ to their initial response on why they can’t add the FWRG ETF to their platform.

Still no response, but I noticed today that FWRG ETF is now available with HL. Guess they managed to get round the settlement issue they used as a poor excuse earlier..

Good to know. I was going to raise it when I kicked off my transfer to them in the new tax year. It probably takes several enquiries before they seriously look into these things, so thanks to anyone who asked them about it.

george4064

Does anyone know if there's a way to find out if an ETF pays distributions in its base currency (USD) or in its share class currency (ie GBP)? Without investing in the ETF and waiting to literally find out!

If it's a platform specific issue, does anyone know how HL treat distributions from ETFs that may (or may not) be paid in USD base currency?

Some ETFs I'm looking at are SPX5.LN and USDV.LN

masonic

george4064 said:

Does anyone know if there's a way to find out if an ETF pays distributions in its base currency (USD) or in its share class currency (ie GBP)? Without investing in the ETF and waiting to literally find out!
If it's a platform specific issue, does anyone know how HL treat distributions from ETFs that may (or may not) be paid in USD base currency?
Some ETFs I'm looking at are SPX5.LN and USDV.LN

You can usually see the historic distributions, either in the (semi)annual report or sites like Trustnet or Morningstar, but I've not seen examples where the official distribution currency isn't the base currency. There are reports of some platforms receiving distributions in GBP, despite this. The one that springs to mind is Fidelity telling someone they receive dividends for VEVE in GBP, despite the distribution currency definitely being USD.

wmb194

george4064 said:

Does anyone know if there's a way to find out if an ETF pays distributions in its base currency (USD) or in its share class currency (ie GBP)? Without investing in the ETF and waiting to literally find out!

If it's a platform specific issue, does anyone know how HL treat distributions from ETFs that may (or may not) be paid in USD base currency?

Some ETFs I'm looking at are SPX5.LN and USDV.LN

I own USDV on Trading212 in an Isa (so GBP) and its last dividend in July appears to have been received in sterling - if in a foreign currency it usually states it and shows the exchange rate - despite being declared in dollars. Sometimes these things can be because the funds/companies allow brokers to choose to receive dividends in a particular currency e.g., Shell and Unilever allow shareholders/brokers to make an election between euros, sterling and dollars.

Looking at USDV's webpage it isn't obvious.

https://www.ssga.com/uk/en_gb/intermediary/etfs/spdr-sp-us-dividend-aristocrats-esg-ucits-etf-dist-zpd6-gy

Edit: Wrong link. For some reason I'm struggling to find it.