My unit trust with Endowus failed to pay dividend. Should I worry?

[BBCWatcher]

My configuration was to reinvest my dividends. So every month start I will received an email saying I received $x dividend from the fund and they will be reinvested. Then few days later I will get new units.

However till now, no email, no units. Totally blank.

Well, there was an Easter holiday in the mix. In many countries that's a pair of public holidays (the Friday before and Monday after Easter). Today is the 7th "full" business day in April after deducting those two days. Have 7 business days been enough for past reinvestments to show up as additional units? If they have then try asking Endowus what the holdup is.

 

[BBCWatcher]

Coupons are not subject to withholding tax, or any other US tax?

Individual U.S. bonds are generally eligible for the portfolio interest exemption (when held by non-U.S. persons or non-U.S. entities), i.e. they're U.S. tax free. When a bond fund domiciled in Ireland (for example) holds those same bonds their U.S. taxability doesn't change.

The U.S. doesn't levy taxes on non-U.S. bonds held (or not held) in non-U.S. funds by non-U.S. persons.

Individual U.S. municipal bonds are generally U.S. tax free for everyone.

 

[BBCWatcher]

And here's an interesting question: why are residents of Singapore investing in this PIMCO fund? The charges are pretty high, and this is a U.S. bond index fund. (Corporate, government, and some other stuff like mortgage-backed securities. All supposedly investment grade. Typical time to maturity is about 5 years.) It doesn't invest in bonds anywhere else or in any other currencies. What's this U.S. bond fund supposed to be doing for you, the resident of Singapore?

 

[andyhtc]

why so? what happened

One of my tasks involves money collection. Normally, a client will pay up on time or ask for an extension. A missed payment without any explanation is a bad omen. Anyway, someone already posted bad news that could possibly be linked to this.

 

[BBCWatcher]

Anyway, someone already posted bad news that could possibly be linked to this.

It's not. PIMCO paid the dividend. The most likely explanations are that Endowus dropped the ball or nobody did, because the Easter Bunny hopped across the usual schedule on the Endowus side.

 

[RedsYWNA]

Individual U.S. bonds are generally eligible for the portfolio interest exemption (when held by non-U.S. persons or non-U.S. entities), i.e. they're U.S. tax free. When a bond fund domiciled in Ireland (for example) holds those same bonds their U.S. taxability doesn't change.

The U.S. doesn't levy taxes on non-U.S. bonds held (or not held) in non-U.S. funds by non-U.S. persons.

Individual U.S. municipal bonds are generally U.S. tax free for everyone.

Thanks, I did some googling.

Am I correct to say the US govt and municipal bonds and related ETFs, are generally exempt from WHT but not individual corporates?

I saw some bond funds with WHT exemption at 80-90% range instead of 100%.

I believe the difference is due to corporate bonds for the 10-20% non-exclusion?

 

[BBCWatcher]

Am I correct to say the US govt and municipal bonds and related ETFs, are generally exempt from WHT but not individual corporates?

No. Let's assume a non-U.S. person (without any effectively connected income from a U.S. trade or U.S. business) is holding these bonds/bond funds....

1. Individual U.S. government, municipal, and corporate bonds: not U.S. taxable.
2. U.S. bond (any type) funds domiciled outside the United States: not generally U.S. taxable at any level.
3. U.S. government and corporate bond funds domiciled inside the United States: might be subject to withholding tax (varies), but withheld tax can be recovered (later, without interest) through a nonresident tax filing with the IRS; U.S. estate taxable.
4. U.S. municipal bond funds domiciled inside the United States: generally no U.S. income tax; U.S. estate taxable.

I saw some bond funds with WHT at 80-90% range instead of 100%.

U.S. bonds are generally eligible for the portfolio interest exemption. There might be a few non-exempt bond-like instruments in existence.

Why all the interest in U.S. bonds, though?

 

[RedsYWNA]

Why all the interest in U.S. bonds, though?

Thanks, because I have a sum of USD that I can potentially invest in the US bond ETFs, while waiting to enter certain stock positions.

Initially I had invested these into US T-bills, but with my small size < USD 50k, its diff to get a fill in IBKR after my initial T-bills expired. Hence I had left them as IBKR cash balance but the first 10k doesnt generate interest income.

So I might as well look at some T-bills ETFs, since I now know that these are non-taxable...........

 

[reddevil0728]

Thanks, because I have a sum of USD that I can potentially invest in the US bond ETFs, while waiting to enter certain stock positions.

Initially I had invested these into US T-bills, but with my small size < USD 50k, its diff to get a fill in IBKR after my initial T-bills expired. Hence I had left them as IBKR cash balance but the first 10k doesnt generate interest income.

So I might as well look at some T-bills ETFs, since I now know that these are non-taxable...........

Actually I’m not sure why you had that much trouble getting a fill unless you are placing too high of a limit price based on the not so “live price” you see in IBKR.

 

[$ingaporean]

No. Let's assume a non-U.S. person (without any effectively connected income from a U.S. trade or U.S. business) is holding these bonds/bond funds....

1. Individual U.S. government, municipal, and corporate bonds: not U.S. taxable.
2. U.S. bond (any type) funds domiciled outside the United States: not generally U.S. taxable at any level.
3. U.S. government and corporate bond funds domiciled inside the United States: might be subject to withholding tax (varies), but withheld tax can be recovered (later, without interest) through a nonresident tax filing with the IRS; U.S. estate taxable.
4. U.S. municipal bond funds domiciled inside the United States: generally no U.S. income tax; U.S. estate taxable.

U.S. bonds are generally eligible for the portfolio interest exemption. There might be a few non-exempt bond-like instruments in existence.

Why all the interest in U.S. bonds, though?

Hi BBCWatcher, should we not hold us bonds? I mean as part of diversified portfolio, we need some bonds from USA as well? I also have SSB, Nikko AM ig bond & some Asia bond fund. Why pimco income fund? I researched and it is one of the better managed bond fund.

 

[RedsYWNA]

Actually I’m not sure why you had that much trouble getting a fill unless you are placing too high of a limit price based on the not so “live price” you see in IBKR.

If you look at Reddit IBKR, it's a common problem for retail investors. Basically, our amounts are too small for a fill. The T-bills market is meant for sharks like Buffett, not for small fries like us, unlike the US stock market where getting fills is easy

 

[reddevil0728]

If you look at Reddit IBKR, it's a common problem for retail investors. Basically, our amounts are too small for a fill. The T-bills market is meant for sharks like Buffett, not for small fries like us, unlike the US stock market where getting fills is easy

No eh.

if do market order even 20k can also fill as soon as click submit button

 

[RedsYWNA]

No eh.

if do market order even 20k can also fill as soon as click submit button

I have tried market orders before.......no fill. Anyway market orders can be dicey, if they fill you in a few separate transactions because it's USD 5 per fill.

Anyway with the new info on taxes (thanks BBCWatcher, Socrates and others), I will just buy SGOV instead of trying individual T-bills. More efficient!

 

[limster]

http://globalincome50.blogspot.com/2019/02/introduction-to-us-corporate-bonds.html
Pls refer to this blogpost from our MM/SSI bond expert.
By expert I mean someone who shares his actual experience buying US bonds, not just cut and paste info from internet.

 

[s0crates]

Why all the interest in U.S. bonds, though?

Not just US bonds, global bonds.

The US fixed income is so much more diversified and robust than the sg/sgd denominated fixed income market.

If I want to pay lower expense ratio to access an index fund which has a larger pool of underlying holdings, I can.

If I want to pay an active manager like PIMCO to actively manage duration, credit, and single company risk, I can too.

Why pay Nikko am to buy a pathetic small amount of underlying holdings for a35/MBH? They have the easiest life as a fund manager lol

 

[DevilPlate]

http://globalincome50.blogspot.com/2019/02/introduction-to-us-corporate-bonds.html
Pls refer to this blogpost from our MM/SSI bond expert.
By expert I mean someone who shares his actual experience buying US bonds, not just cut and paste info from internet.

This guy holds more counters than u haha

 

[sohguanh]

irrelevant. I'm holding PIMCO GIS INCOME FUND on a different platform and the dividends are already received on 31 Mar

Agree. Yours even faster mine received on the 3rd Apr. I am using poems.

 

[$ingaporean]

Ok, finally got the email that dividend has been received and they will proceed to reinvest.

The problem, according to endowus, is at the uob kayhian side.

 

[sohguanh]

Ok, finally got the email that dividend has been received and they will proceed to reinvest.

The problem, according to endowus, is at the uob kayhian side.

We are starting to see the issues of having one more party UOKH in the whole flow. Endowus seem to be quite dependent on UOBKH side to do finish before they can do theirs. I wonder why not Endowus just merge with UOBKH lar. UOBKH also sell UT besides stock trading etc. Then we will see name change to UOBKH (Endowus subsidiary) ?

 

[BBCWatcher]

Hi BBCWatcher, should we not hold us bonds? I mean as part of diversified portfolio, we need some bonds from USA as well?

Not just US bonds, global bonds.

I think this is the point. I don't know why the U.S. bond market would be of specific interest to most residents of Singapore. There are global bond index funds, for example CRPA.