Inherited £100k: how should I invest it?

xylophone wrote: »

Why not transfer the cash to your Swedish account and invest/save in Sweden?

I wouldn't rely too much on that blog. It mentions:

- one place to hold cash in Sweden. This may well be useful.

- a variety of P2P platforms. It doesn't say nearly enough about the risks of P2P. P2P is neither a mainstream investment, nor something similar to a savings account which happens to pay more interest. At best, it's a niche investment which you might choose to hold a little of alongside mainstream investments — or you might avoid it altogether (which is what I'm doing).

- one place to hold mainstream investments. But it says nothing about the costs involved, or the range of investments on offer.

It may be worth investigating that mainstream investment option, to find out what it covers, with what costs. However, with the relatively large amount you have to invest, the chances are that you'd do better with Interactive Brokers (interactivebrokers.com). This is a large US-based investment platform, which is happy to accept customers in many countries.

Their platform looks very complicated. However, you'd only need to figure out how to do one or two things on it. The aim would be to put you cash into 1 or 2 ETFs (ones traded on London or other European stock exchanges, not US ETFs). IB has very low charges for buying/selling shares (including ETFs), and for currency conversion (if required — and they also let you hold currency in several different currencies). When not buying/selling, they have a minimum charge of $10 per month, which is waived for accounts worth over $100,000 — so you might avoid this, but in any case, it's not much to pay for an account worth a decent 5-figure sum.

Which ETFs would you buy? At its simplest, you might buy 1 global equities tracker, and 1 global aggregate bonds tracker. For instance, if you put 60% of your capital in the equities ETF, and the other 40% in the bonds ETF, that would give you something broadly similar what UK-based investors who hold Vanguard Lifestrategy 60% Fund have.

The usual idea is to hold an equities ETF which doesn't use currency hedging, and a bond ETF hedged to your home currency; however, I'm not sure whether bond ETFs hedged to the swedish kroner are available; alternatives that are available include: hedged to the euro, hedged to sterling, and unhedged (giving you a mixture of major global currencies).

ETFs are available as either "distributing" (which pays some income each year — which you may then choose to reinvest) or "accumulating" (which automatically reinvests it). Which is better for you may depend on how Sweden taxes income from ETFs, which I don't know. Do they tax you each year on the income automatically reinvested in accumulating ETFs (as the UK does, for instance), though you haven't received it in cash?