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"Better than cash" Euro investments?


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Asking for a family member who wants to avoid negative interest rates. What would be some alternative to cash, or low risk investments, keeping it in Euro?

 

One possibility they mentioned was a German Real Estate fund (Wertgrund WohnSelect D), which I don't know much about. I suppose German multi family real estate in second tier cities is relatively safe.

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Not for everyone - but one of the safer alernatives is the 'cross mortgage'

We have a UK source funding an internal  1-Yr CAD mortgage at a fixed rate; every maturity the mortgage either rolls over, or the capital repatriates. The expectation is that over time CAD appreciates (petro currency) and the pound depreciates (brexit); resulting in a material (pound denominated) gain upon repatriation. Interest rate differences between the two countries largely a non-consideration.

 

About once every 7-10 yrs, the CAD/USD FX rate is at parity, and most would expect that post brexit - the pound slowly drifts downward against the Euro.

Comes repatriation day (whenever it eventually happens) a net 25-40% tax-free FX  gain is not unrealistic.

 

SD

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2 hours ago, backtothebeach said:

Asking for a family member who wants to avoid negative interest rates. What would be some alternative to cash, or low risk investments, keeping it in Euro?

 

One possibility they mentioned was a German Real Estate fund (Wertgrund WohnSelect D), which I don't know much about. I suppose German multi family real estate in second tier cities is relatively safe.

I would buy a basket of the following European companies (assuming your relative can avoid touching it for 10 years): Robertet (RBT FP), L'Oreal (OR FP), Davide Campari (CPR IM), Aena (AENA SM), Heineken Holdings (HEIO NA), I would also make a half allocation to Dior (owns LVMH).    If you relative is willing to look at British pound, I would suggest RELX PLC & British American Tobacco as well as Cranswick PLC.  I own all of the companies that I mentioned.  I own a big position in Dior but I bought it in 2012 and I am nervous about Chinese economic situation and impact on consumption.  If he is willing to own USD denominated assets, I own and like Charter (CHTR), NEN (but he should own it only on swap, otherwise tax headaches are insane for a non-US investor), Dominos Pizza, Facebook.  In Swiss Franc, Lonza and Alcon are somewhat attractive.   In Swedish krona, I own Swedish Match and I think that it is quite attractive.    In Canada, I like both Canadian National and Canadian Pacific.   In the US I also own MSFT, but I am hesitant to recommend it - bought around $117 in April of 2019.   

 

 

Edited by Dinar
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