huxs
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Post by huxs on Sept 17, 2015 11:00:40 GMT
Hi,
Probably a stupid question but is there any simple way of mitigating currency risk when using Mintos.
I am not sitting on a pile of EURO's and I have no need for EURO's in the future so would have to convert £ into EURO's (probably in small monthly chunks) to use the platform and back again when I take money out (which I have no plans to for the next few years). I am assuming there is no way to mitigate the risk that any profit I made in Mintos would not be eroded by a swing in the exchange rates?
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homes119
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Post by homes119 on Sept 17, 2015 13:58:34 GMT
Depends what you mean by simple ;-) but there are ways. I'm not an expert but i've started investigating for hedging but in the opposite direction (euro based investor investing in the UK p2p sites). You can hedge via futures bought through a brokerage or through currency ETFs that would result in shorting the EURO (provided you have cash sitting idle which can be used in this regard). You can also margin trade forex I suppose.
If anyone has more insights on the best and safest way to do it that would be much appreciated.
Alternatively, if it's not a considerable amount of your total portfolio you could decide that some currency diversification could be welcome. I am tilting towards that as I have most of my assets in euros already.
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pikestaff
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Post by pikestaff on Sept 17, 2015 15:04:50 GMT
A short EUR / long GBP ETF would be one possibility. This link describes one. I don't know if there are others. www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0000RRVCYou'd have you buy it through a broker. Another possibility is spread betting on something like City Index, or your broker may offer a spread trading platform. Either way it's going to cost you. There will be a running drag on your yield and the transaction costs will be prohibitive unless you are investing substantial sums. If it were me, I'd not want to bear the costs. I'd either not invest in EUR at all, or I'd accept the currency risk. |
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huxs
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Post by huxs on Sept 18, 2015 14:16:25 GMT
Ok thanks, so just accept the Currency risk seems to be the easiest option. Next question is how best to deposit money (without getting hit by high transfer fees)??
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Post by martins on Sept 18, 2015 14:47:23 GMT
We recommend using TransferWise. Ok thanks, so just accept the Currency risk seems to be the easiest option. Next question is how best to deposit money (without getting hit by high transfer fees)?? |
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Post by wiseclerk on Sept 18, 2015 14:56:14 GMT
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huxs
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Post by huxs on Sept 18, 2015 15:50:28 GMT
Great thanks one last question, if I wanted to move money back to the UK (to GBP) in the future would I get charged by Mintos ? or does Mintos send EURO's to my Sterling bank account and my bank charges me a fee?
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Post by martins on Sept 18, 2015 16:44:24 GMT
We can transfer money back via TransferWise too.
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