3 Ways to Own Swiss Francs (And Protect Yourself From a Falling Dollar)

The first time I bought Swiss francs was, well, laughable—at least looking back on that moment three decades later.

That was 1994. I was a Wall Street Journal reporter at the time, and I’d just finished reading Jim Rogers’ book, Investment Biker, in which he rode a specially built BMW motorcycle around the world, stopping along the way to open brokage accounts where the economies seemed on the upswing.

He made a point that resonated with me: America isn’t the only place to benefit from the rise of the consumer economy.

Though I didn’t really grasp it at the time, I’d experienced as a kid everything Jim was writing about. I’d shopped local supermarkets—by myself; story for a different time—in Frankfurt, Germany as a 10-year-old. At nine, I’d had to buy anti-vomit meds—also for another time—at St. Pancras Station in London.

Point is: I knew from my own travels that the world was pretty much chasing the same life I was living in the US. My adventures through Europe, India, South and Central America showed adult me that I needed some of my wealth at work outside the US, to profit from the world’s rising consumer class.

So, I started opening bank and brokerage accounts around the world—literally, faxing and emailing account opening requests to brokerage firms in Australia, New Zealand, Hong Kong, Oslo, London, Dublin and a bunch of other places.

I also wanted a bank account in Zurich simply to hold Swiss francs because I knew from all my reading and all my research that the franc was simply the best of all the world’s currencies—even the dollar.

But how to buy francs in Dallas, Texas, where I was living?

I asked a bank teller and she looked dumbfounded that anyone would want to own a foreign currency unless they were traveling. I contacted a Swiss bank; the person on the other end of that fax politely told me to scram… unless I was talking about depositing half a million, and if so then we should talk.

Ultimately, I ended up at DFW airport, standing in front of your basic currency-exchange booth, converting about $2,000 into Swiss francs. (This was long before the militarization of American airports; I could just stroll the departure lounges to find an exchange booth.)

Like I said, it was a laughable way to own francs. And expensive, given the currency-conversion upcharges those places always impose in what should be considered financial extortion.

All of which leads to me the point of today’s dispatch: An “Ask El Jefe” question that landed in my inbox. A reader named Inna sent it. And it’s a fine question in line with my experience in The Great Swiss Franc Hunt of ’94.

To wit: If I don’t have an account in a foreign bank, how can I buy and hold Swiss francs? Schwab told me they did other currencies but not Swiss francs.

These days, you have a few ways to own francs that don’t include a currency exchange booth.

#1. Moneycorp (sign up with IL’s affiliate link)

I first met with Moneycorp down in Portugal’s Algarve district back in April at an International Living conference. I have never used Moneycorp, but had I only known…

By and large, Moneycorp is where folks go to send big money abroad if they’re buying a house, or they need to wire a large sum overseas for whatever reason.

However, Moneycorp can also simply convert dollars into foreign currency—say, the franc—and you can just leave the francs in your Moneycorp account.

To me, it’s an easy and convenient way to own francs. You won’t earn any interest, but then again, I don’t own insurance on my car because I expect anything other than protection against bad juju that might happen. In this case, I just want own francs to protect my spending power from a declining dollar. So I am happy for my francs to do nothing but twiddle their thumbs… or whatever idle currency would do.

#2. Wise (wise.com)

This is going to be very similar to Moneycorp.

Wise runs a global currency-transfer service, and I use it all the time to move between dollars and euros to run my bi-continental financial life.

Through the Wise app on my phone, or at wise.com, I can simply tell Wise that I want a subaccount for francs, and it pops up. Then, also in the app, I can instantly convert dollars into francs that, as with Moneycorp, would sit in my account.

Again, no interest. But, again, doesn’t matter.

#3. Invesco CurrencyShares Swiss Franc Trust (symbol: FXF)

This is an exchange-traded fund, or ETF, that trades like shares of stock on Wall Street.

This is the best option for anyone who has cash in a brokerage account or IRA that they want to put to work in francs.

I have FXF in a couple of my retirement accounts, and it represents the single-largest position in my largest IRA—at the moment, 41.1% of that account. (Gold, for those keeping score at home, is the next largest position at nearly 20.5% of the account.)

FXF simply owns francs. Nothing else. No stocks, bonds, whatever. So you have pure exposure to Swiss currency. No interest income here either. But I’m not too worried about that.

I expect my return to come in the form of a Swiss franc that protects my lifestyle from the declining value of the dollar… and, at worst, the potential collapse of the dollar, if we get a crisis or if the dollar loses reserve currency status because of the world’s reaction to US government actions.

Hope that helps, Inna… and everyone else who has been looking for a convenient way to stuff some francs into their nest egg.