RetireJapan

As with some others here I have GBP languishing in a UK account unable to invest and reluctant to transfer to Yen at the current exchange rate.

The good news is I was able to get my trading212 account activated!
However. The account Currency is EUR.

I'm asking Trading212 if I can close and reopen a GBP account but I'm not hopeful as there wasn't any method to specify the currency during the account creation process. I.e. I suspect if you are based outside the UK you have to deposit in Euro.
They don't support multi-currency accounts at this time.

Anyhow. I'm keen to put the money to work.

So I plan to deposit GBP converting to EUR in the process. Then immediately purchase GBP denominated funds converting from EUR in the process.

I assume this will give me a currency conversion hit in both directions but at least the money would basically be invested in GBP at it's current value. The reason I'm so keen to to invest in GBP is I'm working on an assumption that it will gradually gain in value against other currencies over time.

Anyone see any obvious problems with the above approach?

I'm assuming I'll need to report any capital gains to the Japan authorities myself when it's time to sell.

I don't think it makes any difference what currency you invest in as long as the underlying assets are the same. It would only make a difference if you were just holding cash deposits.

If you buy a stock index and it is denominated in GBP, if the value of the GBP rises the index will be worth fewer GBP because the underlying asset values did not change.

As long as that is true, you might as well just invest in Euros and save yourself the exchange fees.

RetireJapan wrote: ↑Wed Jan 20, 2021 2:29 am I don't think it makes any difference what currency you invest in as long as the underlying assets are the same. It would only make a difference if you were just holding cash deposits.

If you buy a stock index and it is denominated in GBP, if the value of the GBP rises the index will be worth fewer GBP because the underlying asset values did not change.

As long as that is true, you might as well just invest in Euros and save yourself the exchange fees.

Hi Ben,

Thanks! I really struggle with this topic. (Amongst many others.).

Do you know of any online resources that explain this in a visual way?

This article explains it in more depth: https://monevator.com/currency-risk-fund-denomination/
And Andrew Hallam is always good: https://en.swissquote.lu/international- ... ndex-funds

RetireJapan wrote: ↑Wed Jan 20, 2021 7:14 am This article explains it in more depth: https://monevator.com/currency-risk-fund-denomination/
And Andrew Hallam is always good: https://en.swissquote.lu/international- ... ndex-funds

Thanks Ben! That first link has parted the clouds!

And a Chris Biggins reference to boot!