Cash offshore

[bob1_1]

Good evening all. Im going to visit family in London in a three years. Was thinking due to the Rand/Pound strength this may be a good time to move some cash offshore. Anybody have any ideas what is the best way to do this, with some capital guarantee?

[SimonPB]

you either hedge the strong rand OR you get a capital guarantee .. can't have both ..

[bob1_1]

Correct should hedge, but with little risk of downside?

[#4]

I will talk from my own experience of trying to do the same thing. Offshore bank accounts are extremely expensive things to move money around in. You get hit with a GBP20 fee everytime you want to move money into a different currency or bank account - and the exchage rate they quote you is sh....t. If you want to hedge the rand in 3 years time, just stick it into a local income fund of sorts. Absolutely no way you can predict which way the currency is going to go in 3 years. Remember that we hit less than R6 to the dollar in 2004 or 5 (I can't recall when exactly)

[SimonPB]

well if it just cash (and you don't buy something with the cash) all you have is currency risk .. but you can't move cash this early for a trip .. would need to open an international bank account (and earn no interest) .. or use a derivative - but that would cost a fortune over next 3 years ..

[Preston]

Sit tight, i cannot say much for now but soon this will not be a problem. You would not need at derivatives. Just watch the press.

[Preston]

Sit tight, i cannot say much for now but soon this will not be a problem. You would not need any derivatives. Just watch the press.

[SimonPB]

lifting of exchange controls not the issue as I doubt it more than the R4m per year we already allowed .. unless you mean somebody finally bringing currency ETN's to market ..

[partridge]

Bob you sound like an intelligent person - what on earth are you thinking of? What you are really doing is betting on the Rand being currently overpriced- an inflation play-for the next three years ( because as sure as you are sitting there and I am sitting here a GBP aco***** is going to cost you actual money to run and you will see your capital depreciate in GBP terms becuaes of their high inflation ( have you looked at their inflation ) and the interest(!) - taxable - is going to be three fifths of half of b....r all). Buy Richmont.

[prancing_horse]

Buy British American Tabacco (BTI), will more than pay for your trip in 3 years time. I still believe one of the more overvalued currencies at present.

[klapka]

And the following quote from Standard Bank (Isle of Man) shows there is no such thing as a 'guarantee of capital' when it comes to dealing with a bank. "In the unlikely event that the Standard Bank Offshore issuing entity that issued the product to you becomes insolvent, repayment is not guaranteed by any other party (including any other Standard Bank Group entity) and this could result in loss of potential gain, interest, the Capital Bonus and your original capital."

[richardw]

Similar to Richemont suggestion, one option is to put some money into a stock priced in pounds, where the SA price follows the UK price. Benefit from divs, natural price increase and extra bonus Rand-price increase if the pound strengthens. Example BTI, say.

[bob1_1]

I did consider offshore companies such as BTI, Richmont and even DBX trackers. Must also be others methods?

[richardw]

Definitely. Effort vs risk, I guess. At least it's reasonably liquid and can grow the holding a bit while you wait. Obviously just holding rands is a position, as is holding pounds in a foreign account. You could also diversify - put some here, put some there, etc.

[#15]

A currency ETN would still suffer from time decay since they are based on a combination of futures contracts aren't they? Example the RMB Oil ETN is based on the WTI crude oil front month futures contract traded on the NYMEX which would suffer from time decay and interest built into the prices of those contracts. I personally don't find too much value in ETN's as long term investments. I'm trying to think of options but my best bet other than buying pounds directly would be to buy DBXUK...

[striker]

- In three years, you could be too late. The balance of probabilities all point to a weakening Rand. The prognosis for the countries economic health, momentum and sustainability are troublesome. Whilst I concur that the costs of an offshore account are hi