UK Municipal Bonds

[Boho]

I've had this in my notes for a while:

UK municipal bonds - check in the Fall ("autumn")
https://www.ukmba.org/

I'm in the US. When they start with the UK munis how could I invest? Through Fidelity?

 

[bingybear]

before asking how you can invest, why do you want to invest in these?

 

[socca]

I prefer to own Vanguard Total International Bond Index Fund Admiral Shares (VTABX) and let the analysts in Vanguard's Fixed Income Group decide whether investing in these bonds is a good idea. VTABX already has a NAV of $77.3B as of 3/31/2017 and it's only been around a few years - very impressive!

 

[Boho]

I have an international bond fund and at this point I have no idea whether I'd invest in the UK bonds. I kind of fantasized about it for political reasons without knowing whether they existed, before I had money to invest. Eventually I actually had money to invest and I discovered they were coming in the fall. I've been curious about them for a while and decided to finally ask.

 

[Texas Proud]

You have to be careful when investing in foreign securities...

If you invest yourself, then you are taking on all FX risk... that could be good if the dollar is going to weaken...


If you go with a large fund, then some (maybe most) hedge against the FX risk...

I do not like the EU fixed rates as they are LOW... but, I do not know what the UK is paying right now... I would think munis are lower than normal, but that is only an assumption based on that happening in the US...

 

[bingybear]

Most likely the interest would not be tax free to US investors. I have not tried to see how to buy them from the US. If you use Fidelity as a broker, give them a call and ask if you are interested. Otherwise you might be able to set up a foreign account from which you could purchase them. That would likely require extra tax filing at year end.

Personally I would not mess with them as a US based US citizen. I would use foreign bond funds or ETFs to invest in foreign bonds.

 

[Alan]

Most likely the interest would not be tax free to US investors. I have not tried to see how to buy them from the US. If you use Fidelity as a broker, give them a call and ask if you are interested. Otherwise you might be able to set up a foreign account from which you could purchase them. That would likely require extra tax filing at year end.

Personally I would not mess with them as a US based US citizen. I would use foreign bond funds or ETFs to invest in foreign bonds.

Exactly.

Living in the U.K. I and DW own tax free cash ISA's but being US citizens we also pay US taxes on them and any tax free investments in the U.K. are taxable in the US.

However, FX rates will swamp any minor advantages you may gain in interest rates or buying/selling bonds. I use tax free savings vehicles in the U.K. because it is money that is going to be spent there, not transferred back to the US.