Advice for Expat Investors

By HopwoodHouse, 20 October, 2015



With low interest rate environments prevailing across most of the globe, a lot of people are looking for ways to make their money work harder and this is true for expats as much as for anyone else. Bank accounts are naturally still the best place for money you need access to, but they pay very little interest on money that you're putting away as savings. If you want returns on your savings that could form a worthwhile supplement to your income, there are a number of alternatives you might wish to consider that often suit the needs of expats fairly well.

Protected and Guaranteed Investments

The big advantage that bank accounts still have, of course, is the very low level of risk they carry. This is what puts many off of looking into other, potentially more profitable investments. If you are very concerned about risks but are not satisfied with the interest rates offered by savings accounts, you might want to consider protected or guaranteed investments. These guarantee you get your money back, while offering the potential for much better returns on that money than your bank account gives you.

Often, these are investment funds in which a number of people place their money to be professionally managed. The returns you receive may work in any of a number of ways. They could be linked to the performance of a particular stock market index, or to a collection of indices.

Bear in mind, however, that the guarantee often will not immediately apply to your full investment. Often, the guarantee covers around 80% or so.

Collective Investment Funds

Many protected investments also fall within this category. These are funds which pool the assets of a number of investors together for investment in one asset type or in a number of different ones. The advantages of placing your money into a collective investment instead of investing it in its own right are several. It is often a relatively affordable way to have your money professionally managed. Placing your funds in a larger pool also provides added resilience to tough market conditions and more leverage when acquiring certain asset types at the best rate, as well as making it easier to diversify the overall portfolio.

There are many funds available with different minimum investment levels, fees, risk profiles and potential returns, so if you shop around you will most likely find an investment to suit you. Different funds may also specialise in different asset types or groups of asset types. Some of the assets that most commonly form part of a collective investment fund include:

Roy Weatherby is a director and property investment specialist at The Overseas Investor,