If you have either spotted a good investment opportunity outside the Philippines, or would like to diversify your portfolio further to offshore outlets, foreign currency-denominated assets is the way to go.
The good thing is, because of the various digital platforms available, distance and even time zone differences should no longer be show-stoppers. There are many ways now to make that investment without having to leave the country, without having to consularize account opening forms, and even without having to stay up late.
One thing to keep in mind, though, is that the US dollar is usually the currency of choice for international transactions.
Philippine banks and other financial institutions usually offer funds that contain shares of international companies. They are often classified by the industry (like technology and power) or geographic location (the US and Europe, for example) that the companies are in.
Going this route is an easy way to start investing overseas. These funds are run by professional international fund managers who make the tactical decisions in order to get the best returns for your money, so you don’t have to do any research or even keep a close eye on worldwide events.
Some of these are feeder funds, so investing in these may actually be more affordable than you think. These contain units or shares of a larger target fund with a higher minimum investment requirement.
Another option is a Fund of Funds, also known as a multi-manager investment. These invest in other types of funds (usually mutual funds or hedge funds) instead of directly in securities. You may be able to find a Fund of Funds that invests in international funds, or Philippine funds containing overseas investments.
You may also want to consider investing in a global hedge fund. In this type of pooled fund, the manager can choose from among the different strategies, including aggressive investing and using derivatives, in order to get active returns. Such investments may have high minimums and require some kind of accreditation.
Another option for making an overseas investment is by buying individual stocks of companies that you believe have the potential to make it big (or bigger, as the case may be). You can do this easily by going to a Philippine brokerage firm and seeing what your options are.
If you’d prefer to handle everything yourself, you can also look for international stockbrokers that allow you to create and fund an account online. Remember, though, that watching the performance of the company you’ll be investing in will be your job/ responsibility.
If you’re the type of person who prefers tangible investments, buying real estate abroad is an option.
There are a few things to consider for this. The biggest one is that you need to check the laws on foreign ownership of property. Some countries can be quite strict on this, while others are a little more relaxed.
Another consideration is that, unless you actually visit the country to see the property, you’ll need someone you can trust to check it out for you. Real estate is usually a huge investment, and you should be very sure before you commit your money.
Going through a trustworthy international broker may be the best way to get this done. They can handle all the paperwork and taxes for you, in exchange for a fee.
You’ll also need to plan how to pay for the property you’ll be buying. The usual method of taking out a bank loan might not be feasible because of the international aspect of the purchase. Remember also that your spending will not stop at the purchase. You’ll have to pay for the upkeep, as well as stay updated with all the necessary taxes.
Foreign exchange is a way for you to invest abroad without actually putting your money in assets overseas. There are many strategies and market knowledge, but the basic concept is simple: buy foreign currency and sell it for more than you paid.
This can be done easily online. You can choose a reputable offshore forex broker and fund your trades through a dollar-denominated local bank account, which you can choose to connect to an international payment company.