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Business / Finance

Add me to the cost: how to get high income in foreign currency

Banki.ru: themes of the day 07.12.2017 at 21:00

Banking and financial news on the website Banki.ru

Recently, the Banks.ru wrote about some of the alternatives to foreign currency deposits. Which assets bring the highest income in foreign currency? This time we compare four instruments: foreign currency deposits, Eurobonds, rental business and projects added value in Europe.

the Russian investors who hold or receive income in Euro, is often compared to real estate in Europe, with other profitable instruments: foreign currency deposits in Russian banks and Eurobonds of Russian issuers.

As practice shows, Eurobonds — the main tool of conservation funds for wealthy Russians. These assets bring the 1.5—5.5% per annum, require no maintenance, are liquid investment tool and are suitable for long-term investment.

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bonds competing properties for lease. Such objects in Europe give comparable income of 3-6% per annum and each year increasing in price. For example, the cost per square meter in Berlin from 2011 to 2016 rose more than doubled. But at the same time the real estate is less liquid and requires the participation of the investor in the management of the site (or hiring a management company).

the foreign Currency deposits is almost zero yield (data Banks.ru, from 0.01% to 1.5%) and profitable for Russians only during periods of depreciation of the ruble.

the Tool allowing not only to maintain but also to increase capital and investor — projects added value in Europe. The essence of the strategy is to buy land or property for a fee below market, to build or repair it and then sell at a higher price. Such projects bring investors a of 10-15% per annum on invested capital.

For comparison, if the investor is investing 400 million euros in each of the four considered tools for year it can earn on foreign exchange deposits to 6 thousand euros on Eurobonds — up to 22 thousand, for the rent — to 24 thousand, and the project added value to 60 thousand euros.

the Important difference between the strategies associated with foreign real estate: investments in bonds of Russian issuers related to the risks of the domestic economy, and property in the EU from such risks free. In this context, Tranio recommends to invest in a stable market of Germany. Local projects added value focused on capital owners with capacity from 30 thousand to 500 thousand euros. Projected yield investors — 10-12% per annum after deducting all costs and taxes. The implementation period of 6-18 months.

the foreign Currency deposits in Russian banks

Eurobonds in Russia

properties for rental in Europe

the Project added value in Europe

the Purpose

preservation of capital

preservation and enhancement of the

Profitability %

to 1.5

1,5—5,5

3,0—6,0 (at the loan — 4,0—8,0)

10,0—15,0

the Risk of losses

low

medium

high

and asset Volatility

high

high

low

Control

not required

simple (you can hire a UK)

difficult (requires CC)

Liquidity

high

high

low

transaction Costs

no

of 0.05—0.10%

5-15%

the Duration of the transaction

instantly

instantly

a few months

the Maximum return on invested capital per year, with private investment of 400 thousand euros

6 thousand euros

22 thousand euros

24 thousand euros

60 thousand euros

Source: Banki.ru, Tranio, CBR

Tranio recommends that you diversify your investments: 70% of the capital to keep a secured asset, such as in high-quality foreign real estate or high-class bond issuers, and the remaining 30% to invest in a sound profitable strategy added value. Thus, the overall risk of loss of capital will be relatively low and the yields high.

Georgy KACHMAZOV, CEO and founder of Tranio, the company's broker real estate for Banki.ru