How to Change Your Currency Handling Settings
Passiv helps you get as close as possible to your target portfolio by using the available cash in your account. But what if you hold cash and assets in multiple currencies?
If you're buying both Canadian and US stocks, then you may be particular about how Passiv treats them. For example, you may want to use your Canadian dollars to only purchase Canadian stocks. This is where Passiv's advanced currency handling settings come in.
With it, you can alter Passiv's calculations to:
1) Keep your currencies separate (eg CAD dollars will be used to only purchase CAD stocks)
2) Retain cash to do a manual exchange or Norbert's Gambit
3) Allocate excess currencies to assets in the same currency (eg remaining CAD dollars will be allocated to all CAD stocks in your target portfolio)
Passiv's standard calculations try to get you as close to your target as possible irrespective of the currencies you hold. This may lead you to incur currency conversion fees from your brokerage. We want to give you full control over how Passiv handles multiple currencies, so we created Currency Separation.
Please note that this is an Elite feature.
Click on the account that has multiple currencies and go in Portfolio Settings.
Two checkmarks allow you to manage how you want Passiv to handle your currencies.
Keep currencies separate:
- When this is ON: Currency exchange is not allowed. Passiv will not suggest any trades that involve currency conversion so you don’t incur foreign exchange transaction fees.
- When this is OFF: Passiv Currency exchange is allowed, which may result in recommended trades that involve foreign exchange transaction fees.
Retain cash for manual exchange (only available when Keep currencies separate is ON):
- When this is ON: Excess currency will be retained as cash so that it can be manually exchanged.
- When this is OFF: Excess currency will be allocated to existing assets in the same currency.
How does this help me?
Let’s say you hold CAD and USD assets in your portfolio but only have CAD in cash.
With Retain cash for manual exchange ON, Passiv will recommend buying CAD assets while keeping enough CAD in cash for you to exchange it to USD manually to then buy your USD assets as well.
With Retain cash for manual exchange OFF, Passiv will recommend buying CAD assets only and will use all available CAD cash.