Is it possible in future to add currency ‘pots’ into ISA holdings? Would be great if we could for example purchase USD and put a limit order in on the FX spot price; that way we wouldn’t need to consider fx rates when buying or selling stocks in USD as we could choose to use funds from a currency pot. You could then sell usd back to your base currency using a sell order at favorable rates later on.
Unfortunately, HMRC rules state that you can’t hold foreign currency in a Stocks & Shares ISA, therefore if the base currency of a stock is not sterling, an FX must be done at the time of trade. However, your suggestion is viable for Invest accounts.
See section about cash on this page
You could then sell usd back to your base currency using a sell order at favorable rates later on.
I wish I knew how to identify when “favorable rates” are occurring! It is something I have got wrong at least as many times as right. I still try to do it, but it usually ends up as something of a fool’s errand.
Thanks for the reply, maybe the USD could be held in an MMF for ISA holdings to comply with the cash rules.
By favorable rate, i simply meant at equal or better than the average price bought in at as to ensure you don’t lose out due to fx. Personally i would never recommend trading fx, as you say, so tricky to predict movements
One way to park USD in an ISA-eligible way would be with an ETF like
Lyxor Smart Cash UCITS ETF USD (STMC)
or a short term bond fund like
iShares $ Treasury Bond 0-1yr UCITS ETF (IBTU)
Neither of these is available on T212 yet.
I think even this goal requires a lot of optimism. It is not really any different to fx trading. That price might take 6 months to reach, or never. Meanwhile you forgo other gains you might have made by investing.