any simple, inexpensive, mainstream methods of investing in non-US/non-Canada securities and currency?

January 23, 2005 4:55 AM

If one is located in Canada, and would like to invest in non-US/Canada securities and currency, are there any simple, inexpensive (fee-wise), mainstream methods to do so? I used to have an account at Interactive Brokers where this would be an option but I found them a little bit badly integrated with the Canadian banking system (i.e. not mainstream).
posted by Big Fat Tycoon to Work & Money (2 answers total)

You can easily buy international equity or fixed income mutual funds.

You can also easily buy ADRs, which are NYSE- or NASDAQ-traded instruments to enable easy North American trading of securities which principally trade on foreign exchanges.

There's no cost-effective way for a retail investor directly to buy foreign bonds or retail investment quantities of foreign currencies.

I actually think that there should be foreign exchange mutual funds, but I don't know of any off hand.

However, a mutual fund which exclusively makes investments in short-dated foreign government and AAA corporate securities should track the currency of issue of the securities quite closely.
posted by MattD at 6:02 AM on January 23, 2005

Retail investors could expose themselves to currency risk/appreciation through foreign money market funds - something like Fidelity Funds II, which has a few currencies available.

A number of international equity or bond funds are currency hedged - the performance you get out of them reflects the underlying securities' performance, with the differentials in exchange rates wiped out. However, you can find unhedged equity and bond funds, as well - this Morningstar article covers this topic well (you can use bugmenot if it asks for a login).
posted by milkrate at 9:32 AM on January 23, 2005