If you're keen on the U.K. maybe have a look at US Treasury Bills/Bonds (3-7 and >20 years) denominated in GBP thru an Irish-domicile ETF.
CU71 and IBTL have done OK for me YTD
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If you're keen on the U.K. maybe have a look at US Treasury Bills/Bonds (3-7 and >20 years) denominated in GBP thru an Irish-domicile ETF.
CU71 and IBTL have done OK for me YTD
Just remember that it's bl**dy sensitive to the exchange rate.
GBP/USD can be a two-edged sword.
Agree, but for me the GBP is the final resting place for the money: independent school fees, hopefully university fees, and most probably a house all to be paid out for in the UK. I think we are lucky (at the moment) with the benefit of a USD income stream - on the right side of timing.
Also happy for the current USD/NZD exchange rate too, makes a bit of a change from around six years ago!
My preference is holding USD in these turbulent times. Can't say much about the GBP as it's been relatively flat to the NZD for the past 5 years, though there's more potential for the GBP to plummet over Brexit.
School fees? What's wrong with public schools?
The NZD is weak to the USD because the NZ economy isn't doing well and potentially we could see under $0.50 in the next 2 - 5 years. How does this translate to the person that has lots of USD or GBP cash? Well you may benefit on the exchange rate but you realise that you do live in NZ and everything you consume and do will go up in price. Inflation is tied to NZ's currency because we simply can't produce everything and since most imported products are based in USD, the retailers are forced to raise prices, and thus inflation becomes a problem.
On the grand scheme, NZ residents won't be doing as well as overseas residents like in N. America. We are plagued with over-regulations, FMA, FIF, AML, etc. The only charm NZ has left is investing in real estate, where the gains can be tax free. But for most places around the world, the principle residence is tax free.
I had to move quite fast yesterday to get shot of these two bond ETFs and lock in the gains when the GBP went above USD1.24. I hope that it's not a one-day wonder!
I left the money in the GBP-denominated S&P500 ETF though.
Now comes the issue of what to do with all those pounds. . .
Currency changes get me but the opportunities at the moment are high and you are quick (as you seem to have been). If you felt like keeping your pounds and knew which way the GBP was going to go in the future, there could be some good opportunities in the UK market itself as there is a lot that is currently undervalued plus some significant swings e.g. take a look at Lloyds on Friday, it finished up 12% and that was from lunch-time (paying around 5% at the pre-lift yield). Small caps are going well too....although, if it were me, I would probably explore some kind of GBP denominated EFT that had predominantly UK based companies AND it paid a good dividend (?IUKD). Maybe the GBP will recover enough before the NZD does and the money can be transferred back to NZD if that is a better home for it.
I am not good in bonds and wonder if the values will start to come down exactly when I buy them. Yours look good but much of the gain has been made?
Unfortunately for me, I have been absolutely absorbed in my 'other' project where I need to dig and fill some big holes in the ground.
Sold up some good yielders on the NZX as the values had got too high and the cash was better used in reducing my risk exposure e.g. how high can CEN go? Thanks to SCL (bought on its Jan 3 low), Milford div income, and Mr Orr; you lined up nicely for me. But I am sad to have sold as they are good long term holds but me, I, at this point, have a better investment use for the money.
Hi Beebop, you seem to have great knowledge on investment trusts. I own: BIOG.LSEBiotech Growth Trust, WWH.LSEWorldwide Health and Templeton Emerging. I have been quite disappointed the returns with these specific trusts and wonder if it is more prudent to have a couple of global investment trusts. Any recommendations? I do own Scottish Mortgage. What sites do you use for info on ITs?
Voltage: I really can't recommend anything and neither would I want to (nor should you take anyone's recommendation as often that is how you can go wrong) but I can say that you do have the "popular" ones and they are the ones I avoid, for no good enough reason other than usually at a premium. For instance, two years ago one youthful chap, who was full of information and 'experience' told me I was doing things wrong and I should be in Neil Woodford's Funds....yeah, right mate! He did put his money where his mouth was and invested his modest earnings into the fund (and only that fund); needless I say anymore?
If you read through this conversation you will see the ones that I own and I own them for good reason but they are my reasons, my risk and in some cases my future gazing (speculation) and I could be as wrong as I am right. Also, and early learning for me was to purchase when they are on a discount to their "normal pattern"....not just on a discount to NAV but running well below where they historically have been without a good reason. SMT at the moment is probably at a low due to the global financial angst and you do seem to be quite focused on tech/growth. I didn't choose SMT but selected its more balanced counterpart (own much of the same but more diversified); MNKS.
I use: lemonfool . co . uk and morningstar . co . uk and trust net . co .uk as my main references/data sources amongst other solid sites/magazines (investor's chronicle).
I really don't want to rehash what I have said before.
I no longer have any major emerging market funds (I lost out on India because I wasn't patient enough), I changed my WWH to BBH, I did have a healthcare property fund but it was taken over ($$$$ for me), and I have MNKS instead of SMT. My strongest performance has been from MNKS followed by a small cap fund called BlackRock Throgmorton and my Japan fund has done nicely but has stagnated of recent times...have bought more.
I suspect you could have bought at a market high point? The past year has really delivered very little in these types of funds - that is why I have some dividend payers. AND why I have activities in other markets e.g. the NZX has delivered very very nicely especially on those shares that were bought when everyone else was running.
At the moment, if you are at least treading water or up around 5 - 10% on the past year, maybe it isn't too bad on a global fund basis. On the NZX....the story can be double that for those with more focused share selections.
Then again, good old global balanced dividend paying ETFs...I loved my short hold in IGF on the US market (just the exchange rate benefits for me were too good not to sell!).
Voltage: I just happen to be in a coffee shop drinking coffee (as one tends to do) and reading the 13/9/2019 issue of Investors Chronicle (I buy my issues on my NZitunes account) and your funds were reviewed. Seem IC have dropped BIOG due to performance issues but I suggest you download the magazine’s issue and read for yourself.
BeeBop many thanks, will do.
If you read my "chats" you will know that I am not based in NZ and I have distinct reasons for GBP.
As for government schools....many countries do not have the general privilege that NZ has with mostly fantastic schooling. If my kid was to go public here, she would be fully covered (except for face) and the international schools are an "expat bubble"....no dirt, no independence, and extremely restricted subject choices (great for a budding engineer, doctor, or lawyer, but not a budding farmer or "world famous actor/ress").
Prior to Brexit hitting the headlines, I did 'store" USD but now the chance to gather GBP has been too good. Further to that, buying NZD directly has been superb. Unfortunately, I am not a quick enough, nor smart enough, expert to figure out how to optimize my USD/GBP/NZD opportunities.
And yes, NZ residents are not doing as well. We were kind of encouraged off-shore as there were no good employment options for us unless we wanted to enjoy the "lifestyle". Just chatting to another academic who has finally decided to leave NZ's fair shores after decades of funding grant applications...offered a place in a great institution and no funding to apply for...get on with the job taking a longview.
So, I DON'T live in NZ and probably another poster or two (on this particular thread) do not live in NZ. But one day, our cash will come back, our spending will be there and hopefully I can return a well educated (at personal as opposed to tax payer cost) young person who believes they are going to work in the agricultural or marine sector.
By the way, I see your location is ChCh: I spent a couple of months there late last year - fantastic city now!
I like this thread - I always learn something.
Like BeeBop, I have an actual use for actual pounds to buy actual stuff, so this has been a good year to accumulate them.
I also hold other currencies as cash (AUD CAD CHF SGD and USD) - mainly as insurance against the arse falling out of the GBP or NZD (or indeed both).
No, the cash doesn't pay well (or pay at all for the CHF), but insurance always costs.
Thanks for the Investor's Chronicle it looks interesting, and I suspect we'll all need all the help we can get with the UK in the near future.
I wonder what next week will hold for Brexit. BeeBop is doing a little "family" holiday to the UK and Ireland.....crossing back from Ireland to Northern Ireland on the 31st (to avoid any issues)....on to London on the 1st.....Prepaid most of the holiday costs when the GBP was down at 1.23-1.24....we shall take any currency opportunities on offer
Must explore Whitbread shares again....as constantly using the Premier Inn chain....GBP30-40 per night, can't be beat, although I am sure my entire global human network partake in the PI T4 at Heathrow (even works well as a London base if One can be bothered with a 40 min underground journey costing GBP3.20): take that as a London travel tip and use SIXT rental car which is very close and saves using shuttles (but only ever book when you are on a UK VPN to ensure you don't get caught with the extra insurance charge on collection).
I wonder which way Brexit will swing?
Too many people have too much invested in Brexit for it to be allowed to come to come to any conclusion this early in the piece.
On the bright side, I expect your Vodafone UK SIM card will continue to work in Ireland and the rest of the EU just as seamlessly as it currently does for some time yet. . .
In the meantime, I have to decide what to do with a swag of pounds. GBP invested as GBP in the UK economy, or GBP invested elsewhere in the world in a GBP-denominated ETF or fund.
Possibly hedged by some other currency invested in the UK via a CHF/Euro/USD/whatever-denominated fund.
Or buy palladium again?
The possibilities are endless.
Travel safe.
What I particularly like about PI T4, apart from being able to keep your Airport luggage trolley in your room, is the range of discounts, specials & freebies available in the restaurant that the promise of a reasonable tip reveals.
I can recommend SIXT, Avis (I still get a special business rate from them) and Enterprise can be very competitive for medium term rentals.
Hi BeeBop.
Yes, good timing.
I have been dithering about those pounds, and have done nothing but think.
I have read and heard from a lot of people that come Brexit Day, the arse is going to fall out of the UK financial markets, and that the pound will sink like a stone.
I'm not so sure. I think that there is as much uncertainty in the air as there is pessimism, and I wouldn't be surprised if things went the other way - with a rise in the UK markets, or the pound, or both.
So there is a lump of pounds looking for a home. I'm just too undecided to take a bet on of what will happen should Brexit ever happen. Let alone a Labour victory in the upcoming election. I don't think Jeremy can win, but I do think that Boris can lose.
So I have the FTSE in pounds
VUKE Vanguard FTSE100
and also pounds in:
IH2O iShares Global Water ETF
IHCU iShares S&P Healthcare
VUSA Vanguard S&P500
Also Diageo (I'm trying to drink myself rich on duty-free whisky)
But I am looking at buying the FTSE in something other than pounds. . .
Have a great day
Spotted this today FYI: from citywire: “Biotech Growth (BIOG) has slipped to its widest discount in three years as shares in the underperforming investment trust fail to respond to a recent upturn in fortunes.The £335 million listed fund closed at 752p yesterday at a 10% discount below its estimated net asset value (NAV) of per share of 838.4p on Friday, according to Numis Securities.
In a note to investors this morning, Richard Harris of broker Cantor, highlighted the discount which he said was the result of ‘a rebound in NAV [net asset value] since early October’.
The discount is wider than the 7.4% average discount at which the trust has traded in the past 12 months. It gives BIOG a ‘Z-score’ of -2.3 which, if sustained, will likely put it in our ‘cheap’ list of this Friday’s Investment Trust Watch.”