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Old 25-06-2019, 10:21 AM   #1269
arcaninx
Senior Member
 
Join Date: Nov 2004
Posts: 1,612
Hi BBCW,

I have another query. Fyi, i am a non-US person. I have some USD in SC account settlement already. Apparently, there is no way to transfer out of SC without converting it to SGD and incur the spread.

so i wonder there is any Ireland domicile ETF for US treasury bonds?

thanks


I'll answer your questions directly below, but I'm not sure why you specifically want to buy U.S. Treasuries and U.S. listed stocks. The investment world is a somewhat bigger place.

1. Your US$100/month flow into U.S. stocks suggests that your purchases of U.S. Treasuries would be in correspondingly low dollar amounts.

If you have a U.S. Social Security number, U.S. bank or U.S. credit union account, and U.S. mailing address, then the very best option is to open a TreasuryDirect account online. TreasuryDirect also offers U.S. Savings Bonds, and they're often even more attractive than other U.S. Treasury bills, notes, bonds, and securities.

Failing that, in low dollar amounts your next best option is likely Schwab. However, you need a minimum of US$25,000 to open an account with Schwab Singapore. You're not required to keep that opening amount there, but it's a fairly big hurdle. Schwab lets you buy U.S. Treasuries at initial auction free of charge and hold them to maturity free of charge. No commissions, no custody fees. And U.S. Treasuries are available in US$100 increments. However, there will be a little bit of cost if you're depositing Singapore dollars into your Schwab account. You can do that via local FAST or GIRO, and the Singapore dollars will automatically be converted to U.S. dollars at a fairly reasonable rate. But the currency conversion cost won't be as low as Interactive Brokers can offer.

Interactive Brokers is another possible choice, but they have a monthly minimum commission if your total account value is below US$100,000. That is, if you don't incur any commissions through trading (or only trivial commissions), IB will charge a minimum commission of US$10 (typically), except if your total account value is US$100,000 or more. Also, Schwab seems to offer better access to low dollar increments of U.S. Treasuries than IB does, and IB charges a commission to buy U.S. Treasuries even at initial auction.

2. As mentioned, US$100/month is a low amount. Assuming you can get past the US$25,000 minimum account opening requirement, Schwab could work pretty well at that level. Schwab offers extremely low cost U.S. stock index mutual funds, notably SWPPX or SWTSX. SWPPX (which tracks the U.S. S&P 500 Index) has a 0.02%/year total expense ratio, and SWTSX (which tracks the Dow Jones U.S. Total Stock Market Index) is 0.03%. True, you'll pay the U.S. dividend withholding tax rate on those funds, and they'll be subject to U.S. estate tax for any amount over your estate tax exemption. (For non-U.S. persons the U.S. estate tax exemption is US$60,000.) But there's no commission to buy either mutual fund, no custody fees, no sales charges, and the minimum increment is US$1.

If you have a U.S. "footprint" (Social Security Number, U.S. mailing address, U.S. bank or U.S. credit union account) then you could open an account with Fidelity U.S. and invest in FZROX. That's their total stock market index mutual fund, and it's the same basic deal except that the total expense ratio is literally zero.

Yet another possibility is to "batch up" your stock purchases and to use Standard Chartered Singapore to buy the lowest cost London-listed U.S. stock index fund you can find, probably CSPX. For example, you could buy US$600 of CSPX every 6 months. You would batch up your purchases in order to reduce the impact of Standard Chartered's minimum commission charge per trade.
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