Whether you’re looking to make and receive payments in different currencies that derive from shares or investments, or simply looking for more information before you “dip your toe in the water”, we hope you enjoy the second instalment of our new sending money abroad blog series.
Retail investors are normally defined as non-professional investors who take part in the buying and selling of securities, funds or exchange traded funds, often via traditional or online brokerages.
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With the rise in free and easy to use share trading platforms and the huge wave of volatility across the financial markets, retail clients are looking to take advantage of international investment opportunities, with many also encouraged by the record low interest rates available in the UK and Europe. This has been emulated in the US markets where some indexes have reached year to date highs following the initial Covid crash in March. We’re not experts in investing, nor do we provide financial advice, but we have helped thousands of our clients make and receive payments in different currencies that derive from shares – we hope you find this useful.
Why are some shares doing some well?
Despite the unknown concerns surrounding both Covid-19 and the possible impact on the economy, there are many investment opportunities presenting themselves across the market, particularly in the US where many large blue-chip organisations are located. Some businesses have been fortunately positioned to maximise revenue opportunities during the global pandemic. Amazon, Microsoft, Zoom, Tesla and Gilead Sciences were in the top 10 most-bought US stocks in April as consumer spending habits morphed into three distinct categories; to protect, to connect and to entertain. When the Federal Reserve bank unleashed one of their secret weapons and started buying corporate bond ETFs, it created a strong buyers’ market that has seen little signs of slowing.
Buying shares
Some share dealing brokers will offer a service to buy overseas shares that are already priced in Sterling. It may be difficult to find out exactly what spread you are paying IE the difference between the wholesale rate and the rate you achieve. For example, if you were looking at buying shares in Tesla, you may be able to find a share dealing provider that will give you access to a US Dollar denominated account, meaning you could use WorldFirst as a way to buy and send money at a better rate. Whilst past performance is not an indicator of future performance, the improving GBPUSD exchange rate will make it cheaper to acquire shares in America, but it will also simultaneously reduce the return value in Sterling if the exchange rate continues to move higher.
Employee shares and share sales
Many businesses offer their employees stock options as part of a long-term incentive package, or perhaps it could be the result of a buyout or merger. You may find yourself in a position where the shares are denominated in a foreign currency, and the preferred method is to have it transferred directly into your GBP bank account. You may not be getting the best exchange rate, nor does this give you any autonomy on when to make the exchange. Why not lodge the currency within your WorldFirst account and let us help?
If you’ve lived or worked overseas, you may still own shares that are held in a share dealing platform like E-Trade or Fidelity. However as mentioned above, you may not receive the best rate if you choose to send the money directly back to your sterling account. Once you’ve decided to sell the shares, as an example, you can have the resulting dollars paid into your WorldFirst dollar account located in New York. We can then help process the currency transfer using our fast, clear and transparent pricing model.
WorldFirst provides an array of services to our clients that includes daily and ad-hoc currency updates, rate alerts, limit orders and a range of forward contracts. We’re always happy to help, so if you’re involved in any of the above, click here to request a conversation with one of our account managers.
Other blogs in this series:
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Investing means your capital is at risk. We have a number of partners who may be able to offer suitable and regulated financial advice. Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest information with the sources outlined above and consider your needs prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs.