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Options to Invest Euro funds from within Canada
January 11, 2024
3:18 pm
Lodown
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If one has Euro cash that needs to be invested for 1 to 5 years what is available from within Canada? What are your best suggestions in the realm of Euro GICs, online investing brokers with access to Euro denominated stock exchanges, etc.

January 12, 2024
3:31 pm
Redfish
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There are several options:

1) HSBC bank in Canada offers a high interest Euro account. However, it posted .05% rate. So interest is not high.

2) You can open an Interactive Brokers account. It offers trading in Euro stocks.
I found one ETF called PEU, trading in the Milan and Germany stock exchanges that offers a money market fund, based in Euro. There are possibly more similar ETFs in the European stock exchanges with similar investing goals.
https://www.justetf.com/en/etf-profile.html?isin=IE00B3BPCH51#overview

3) If you want to keep your cash in Interactive Brokers, it offers around 3.38% interest rate on Euro, on funds over the balance of EUR 10000.

But since IB is an US stock brokerage, you have to be careful with the US Estate tax regulations. (I believe even if you open an account with Interactivebrokers.ca, IB is still considered a US stock brokerage, but if anyone knows of otherwise, please advise).

In the event of death, any non-US resident with US in-situ assets over US$60,000 must file a tax return, even if no tax is to be paid. It seems the threshold to pay US estate tax is US$12 million world wide assets, but there will be changes in 2025.

The In-situ assets includes US properties, stocks and ETF containing US stocks (worldwide, even inside RRSP, TFSA), bonds, and cash in a US brokerage (regardless of currency). A Canadian ETF wrapping a US ETF would be considered in-situ.
A Canadian ETF holding indiviudual US stocks will probably not be considered in-situ.

Please check the info, as I may not have correct info.

In the situation that if you use your Euro to buy a money market fund based in Euro (or any other ETF not holding US stocks), it will not be considered in-situ asset.

4) If you wish to just use the gain in Euro, you may buy FXE or ULE (double leverage) in your Canadian stock broker account. But the base currency is USD for the 2 currency ETF.

This link shows more money market/bond funds in European/USD currencies
https://www.justetf.com/en/find-etf.html?assetClass=class-moneyMarket&groupField=index&tab=overview

January 12, 2024
7:45 pm
Lodown
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Thank you Redfish. Much to consider. IB does sound to be the most interesting. I wonder if there is anyone with actual experience using IB w.r.t. US tax filing requirements, IB trading fees, trading platform ease of use, etc.

January 13, 2024
3:02 am
mordko
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HSBC InvestDirect allows you to trade in Euro (on European stock exchanges). No US estate tax implications.

InvestDirect Canada will become part of RBC by the end of March. I do not know if international trading option will still be available but looks like it might be.

January 25, 2024
3:34 am
AmyR93
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Has anyone used Interactive Brokers for Euro investments? I'm curious about their fees and user experience.

January 25, 2024
3:46 am
NorthernRaven
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Interactive Brokers' Canadian operation (interactivebrokers.ca) is a Canadian brokerage, a member of CIRO and CIPF.

There's nothing IB-specific about the US estate tax implications of holding US securities, real estate and other US assets - an estate with more that $60,000 of those has to file a US tax return, even though the estate would have to be worth many millions of dollars before any tax would potentially need to be paid. Doesn't matter what brokerage you are with.

January 25, 2024
5:55 am
savemoresaveoften
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AmyR93 said
Has anyone used Interactive Brokers for Euro investments? I'm curious about their fees and user experience.  

IB platform is generations ahead of bank offerings. It accomodates sophiscated multi leg strategies etc. However keep in mind, you subscribe to market data you want, and yes u can say non Cad and US stock tickers on it. I wont use it for Cad as commission is based on #of shares, not flat. US stocks trading is literally pennies on the dollars, as you get market maker rebate etc. Options trading fee are also way cheaper compare to bank brokerages. If half of the mentioned terms etc are not familiar to you, its prob not a platform for you.

So typically my monthly date subscriptions fee are about $30 a month, oh and if u withdraw cash more than once a month, $2 per transactions.

Long story short, if you dont plan to use the account relatively actively, it wont justfiy the fees.

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