Interactive Investor - purchase ETF with cash in multiple currencies

Pat38493

Question for II users.

I want to reinvest the dividends from an ETF fund that were paid in USD.  In my cash account I have a mix of GBP and USD.

When I went to purchase more of the ETF, the "available" amount, is the full cash balance including both the GBP and USD amounts.

Does this mean I can use my full cash balance to purchase the ETF and the conversion is already baked in to the number I am seeing?  I was first assuming that I would have to use the "convert currency" option to put everything in GBP as it's a GBP ETF on the LSE, but now, since the available balance is showing everything, I am wondering if I can just do it all in one step.

LHW99

I don't know the answer, but if you subtract your GBP cash from the available balance, it would show you what (if any) allowance has been made for the US$ cash, and if it changes day to day that suggests it is reflecting actual exchange rates, rather than an estimate..

Generally II's currency rates are not the best. When I had some from a share sale, I ended up watching the offered rate until I could get sufficient £ for what I wanted to purchase

Pat38493

LHW99 said:

I don't know the answer, but if you subtract your GBP cash from the available balance, it would show you what (if any) allowance has been made for the US$ cash, and if it changes day to day that suggests it is reflecting actual exchange rates, rather than an estimate..

Generally II's currency rates are not the best. When I had some from a share sale, I ended up watching the offered rate until I could get sufficient £ for what I wanted to purchase

Yes the amount is says is available changes each time I press the button to "buy more" on that ETF.

I have wrote a message to II because the other question is, even if you can do that, how does it fund the purchase - I would assume that if the fund is denominated in GBP, it will first use up your GBP cash and then use other currencies if needed to get the amount you requested?

LHW99

They are usually good at providing a timely reply (though not always within 24 hours)

Secret2ndAccount

When you go to purchase your ETF, it will ask you which currency you want to use to settle. You have to choose one. Therefore you will need to do a currency conversion before you purchase so that you have enough of one currency to complete the purchase.
If you are purchasing a fund priced in $ it would make sense to convert some £ to $. Otherwise you are converting $ to £, then converting all those £ back to $ to complete the purchase
Incidentally, the US stock markets are reducing settlement time from 2 days to 1 day, so this will likely apply to your purchase. Not that it makes a huge difference.