Many people like to invest in foreign currency fixed deposit, such as Australian or New Zealand dollars, to enjoy the higher interest rate. They face a few practical difficulties:
> get a good conversion rate from Singapore dollar to the foreign currency
> get a good interest rate on the foreign currency deposit
It is possible to set up a fund that will invest in a few high yielding foreign currency fixed deposits, e.g. Australian dollar, New Zealand dollar, British pounds, Euro and US dollar. These currencies have higher interest rate than Singapore dollars.
The fund manager will be able to source for the most competitive exchange and interest rate. This should save the investor up to 1% spread on the currency and interest rate. This should be more than sufficient to cover the fee of the fund manager, and still give an additional benefit to the investor. The investor will be able to enjoy the higher interest rate and the spread of currencies.
I think that there should be interest in this type of fund.
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