I think the more important point may be that what you're trying to hedge against, or at least the example you gave upthread, is not only perhaps a relatively low-probability event, but also something that would cause you minimal to no actual loss if it occurred, provided you invested in a sensible globally diversified fund in the first place.Yes, the more I read this thread and research - it sounds more extreme to me. Perhaps I should just accept that one cannot plan for everything. The part about 'converting all the SEK to USD' seems to be the sticky part right now.
...
That said, I'm totally leaning towards at the moment to just abandoning this whole idea altogether. It seems very complicated to execute.
In your example, you suggest SEK (hyper)inflation during the period you invest in SEK-traded funds or ETFs. In that case, when you sell, yes, you will receive a lot more SEK back, because your result in SEK is the gain of the actual fund investments (USD, EUR, and so on) plus the SEK inflation gain. However, if you immediately turn round and convert these SEK into USD or whatever, you end up with what you would have finished with had you converted SEK to USD before investing. The reason is that for the period of SEK inflation, you effectively didn't hold SEK, only fund assets denominated in USD, EUR and so on (though strictly, if you held a true all-world fund, some tiny part of it would be Swedish stocks, currently around 0.8%).
That is, I think you're trying to solve a problem here that is in a sense already solved by simply using any all-world fund, traded in SEK, USD, EUR, doesn't matter. You get the currency diversification (hedging) from the assets the fund holds, and not from the fund's trading or denomination currency, neither of which change your end result.
Yes. Either always stay below $60k in cash, or pay attention not to die while rebalancing, or after funding the account but before trading (or vice versa, after selling but before withdrawing the money). That, or stay away from US brokerage accounts. There are probably some good local ones you can use, offering either SEK traded funds or ETFs or easy access to London and other EU exchanges for Ireland domiciled ETFs.You mean only the cash component is subject to estate tax right? If all the money was invested (the cash in the account was always less then 60K), then if the holder were to die - the account would pass on to the beneficiary without being subject to taxes?
One final note on US brokerages. Avoiding a US estate tax liability by staying below the miserly exemption limits may not mean no US tax paperwork. Some brokers will insist on your estate filing a nonresident alien US estate tax return before releasing your money, and the IRS takes months or even years to handle these. It tends to depend on the broker, and on the amount you hold with them. Just a heads-up here that even staying below US estate tax liability doesn't mean seamless movement of your money to you heirs. (Better that though than having them cursing you at your graveside for having bought US domiciled funds or ETFs.)
Statistics: Posted by TedSwippet — Mon Apr 15, 2024 2:09 am — Replies 11 — Views 684