Thursday, June 30, 2016

June 2016 update ($351,305 +$2,023 or +1%)

↑ Accumulated $4,000 USD as part of my annual saving goal for June.
↑ Dividends for emerging markets sovereign bonds ETF – 178 USD.
↑ Vanguard emerging markets (VFEM) up by 699 USD
↑ Vanguard S&P500 is up by 167 USD
↑ Company shares are up by  2,359 USD (this is includes reinvested dividends).
↑ Rosneft is up by 233 USD
↑ Emerging markets sovereign bond index up by 660 USD
↑ Emerging markets corporate bond index up by 200 USD
↑ Precious metals are up by 190 USD

Grand total additions:  8,686 $ USD.
↓ Gazprom shares are down by 2,775 USD
↓ GBP is down to USD by 8% or 2,934 USD
↓ iShares Core Dax is down by 955 USD
Grand total losses:  $ 6,664 USD.

Wednesday, June 29, 2016

International banking - Global banking – Wealth management

As part of the perks moving to a new job my company offered me a fee free account with one of the very famous and "too big to fail" banks with its overseas branches.
The account is typically available to anybody, who is willing to invest about ~ 400 K USD with the bank.   I opened it up and tried three things with the bank:
-         Applied for a mortgage application.
-         Did some currency exchange.
-         Tested security features.
      Mortgage application was very exhausting – lengthy and tortures. They want to know more than average bank would ask you (for example, separate interview with your partner).  The mortgage advisers would miss interview appointment at very last moment and only notify you by leaving message on the answering machine.
      The end result? Their offer was 1.7% higher than their average retail outlet. The only perceived advantage was they were ready to loan 5 times of your wages, assuming that 25% deposit. I was actually told by the mortgage adviser that as having access to the retail sector, I would be better off there.
      Another example was currency exchange. The bank offers a very convenient feature – you can open one of the currency accounts (15 in total available), so you can keep and spend money in a particular currency.  The bank would issue separate card for each and every account.
   Good on the surface, however there is catch. Their exchange rates are brutal to begin with.  For example USD to YEN exchange rate is 102.8, a bank would buy it 105.3 and sell it as 99.3, the spread is 6%.  It is much higher, than most of the exchange rates in ATMs. It is actually cheaper to go to Japan, withdraw money from an ATM from a USD account  converting it there to Yen in most of the cases. For the less popular currencies the spread is 10%.
      Security is still very traditional – pin codes, there is no calculators to generate random codes for accessing the account, most retail banks are using these days.
     The only advantage I could see in using this bank if you are from a third world country and do not have access to retail services in the US, EU, etc.. This provides you instant access to the mortgages, local credit cards and so on. However you are going to pay a lot extra for it. I decided to abandon using the account, luckily it was free for me, there is not much use.  I could have a better mortgage, exchange rates and security with my average bank.
      Have you got experience with global banking / wealth management and if yes, what was it?