Best place to invest 100K

[Chips15]

I would say avoid frcl due to the whole Brexit/sterling for now
At least while sterling has more to fall

In addition it's overpriced Vs the Nav

What's your recommendation in this instance on where to invest if not in FRCL?

 

[moneymakeover]

For all I know FRCL could be a good idea.
I was put off by the sterling
But I don't have any alternative

 

[Sarenco]

I was put off by the sterling

FRCL has a fairly modest exposure to UK equities and most of those companies would be multi-nationals with revenues from across the globe.

In any event, how can you be so certain that the market has not already priced in Brexit-related risks to the FX rate?

 

[moneymakeover]

I was thinking more along the lines of sterling falling versus euro and then would get more shares in frcl?

Can't see how the fall in sterling can be already priced into a fund which is mainly US based?

 

[Sarenco]

I was thinking more along the lines of sterling falling versus euro and then would get more shares in frcl?

What difference would that make? More shares with less value in Euro terms.

Again, your currency exposure relates to the underlying securities - not the currency in which the trust's shares are denominated.

 

[LoveTrees]

Put quite a bit in Amazon shares imho... That algorithm is amazing...

 

[locknbarrel]

IWDA is subject to exit tax @41%, with a deemed disposal every 8 years, whereas FRCL is subject to the usual income tax/CGT regime.

There are a few other reasons why I often recommend FRCL for retail investors but the relative simplicity of the tax treatment is probably the main one.

Hi @Sarenco
Do you have any particular strategies in hedging agains't sterling risk when investing in a sterling trust like F&C?

 

[Sarenco]

Hi @Sarenco
Do you have any particular strategies in hedging agains't sterling risk when investing in a sterling trust like F&C?

FRCL has a fairly modest exposure to UK equities and most of those companies would be multi-nationals with revenues from across the globe.

Again, your currency exposure relates to the underlying securities - not the currency in which the trust's shares are denominated.

FRCL is not. “Sterling trust”.

Its shares are denominated in Sterling but that does not determine an investor’s currency risk.

 

[locknbarrel]

FRCL is not. “Sterling trust”.

Its shares are denominated in Sterling but that does not determine an investor’s currency risk.

@Sarenco But the fact that you have to transfer your money into sterling to buy it. If sterling falls will that not affect your holding? Or is it that the counter balance of it's holdings being worldwide will mitigate this? Is there a strong evidence that this balance will hold?

 

[jpd]

If the Investment Trust is 100% invested in $s then the fact that is is quoted in £s is irrelevant - your foreign exchange exposure is to the $

If FRCL holds a worldwide selection of shares, then the £/€ rate is more or less irrelevant too.

Long-term hedging of a currency is more of a gamble/bet than a hedge, imho, as long term currency fluctuations are impossible to predict