SRS Portfolio

[JuniorLion]

dividend have 30% tax

Even accumulating etfs have 30% tax. The post-tax dividends are reinvested.

 

[kean1978]

S27 is dividend-paying.

Blackrock is accumulating. Means to say the dividends are automatically reinvested.

Does it mean I will get more units when there is dividend?

 

[JuniorLion]

Does it mean I will get more units when there is dividend?

No. It simply means each unit has higher value.

 

[anecdoctal]

Dear all, I had bought STI ETF using SRS funds many years ago but I had forgotten which platform I had used to buy.

Now I wish to sell, can I just choose any platform to sell?

If not how am I to figure out which platform I used?

Would appreciate some guru's advice.

 

[highsulphur]

Dear all, I had bought STI ETF using SRS funds many years ago but I had forgotten which platform I had used to buy.

Now I wish to sell, can I just choose any platform to sell?

If not how am I to figure out which platform I used?

Would appreciate some guru's advice.

The shares are held with your SRS banks. You can use any platform that can be linked to your SRS account to sell your shares in your SRS account after you linked them up

 

[BBCWatcher]

dividend have 30% tax

Even accumulating etfs have 30% tax. The post-tax dividends are reinvested.

S27 is a feeder into the U.S. domiciled ETF SPY, and consequently it’s subject to the 30% non-treaty dividend tax rate. You pay this tax on a withholding basis. It’s also U.S. estate taxable. Your estate pays this tax, assuming your estate holds over US$60,000 worth of U.S. estate taxable assets on the date you die.

When Endowus puts “(IE)” in their fund description they’re referring to how their fund is a feeder into a comparable S&P 500 Index fund domiciled in Ireland. It’s domiciled in Ireland to enjoy a 15% treaty tax rate on dividends. The fund manager pays this tax, and then the fund manager reinvests the net dividends (buys more shares for shareholders, to grow the fund). This Irish domiciled fund is not U.S. estate taxable, and Ireland does not have an estate tax.

The preceding two paragraphs may be different if you are a tax resident of some other jurisdiction besides Singapore. U.S. persons, for example, are subject to U.S. tax jurisdiction. (S27 is much better in tax terms for them.)

In my view you shouldn’t be investing in a S&P 500 Index fund at all with the possible exception of planned retirement in the U.S. or in a U.S. dollarized country (country with a currency firmly pegged to the U.S. or that uses the U.S. dollar directly). One could make the argument the S&P 500 Index has a little U.S. dollar affinity, although it’s fading. Instead, stick with a global stock index fund for this leg of your retirement portfolio.

Moreover, for tax optimization reasons your SRS account is not the first place to be investing in any stock index fund. Your SRS account should hold the lowest expected yielding part(s) of your long-term portfolio. For example, if you’re investing a portion of your savings in MBH then let your SRS account hold that while your outside (non-SRS) account focuses on the global stock index fund. If you cannot reach your target stock index fund allocation solely with your non-SRS account then sure, some of your stock index fund allocation may need to be inside your SRS account to meet your desired allocation percentage.

 

[JuniorLion]

I'm not sure if the advice makes sense.

It's not as though companies like Apple and Google and Nvidia's shares are worthless in non-US dollars.

Even if US dollars collapse, as long as these companies are hugely profitable, they are still worth something in non-USD.

Maybe explain your thoughts?

 

[demoforce1]

S27 is a feeder into the U.S. domiciled ETF SPY, and consequently it’s subject to the 30% non-treaty dividend tax rate. You pay this tax on a withholding basis. It’s also U.S. estate taxable. Your estate pays this tax, assuming your estate holds over US$60,000 worth of U.S. estate taxable assets on the date you die.

When Endowus puts “(IE)” in their fund description they’re referring to how their fund is a feeder into a comparable S&P 500 Index fund domiciled in Ireland. It’s domiciled in Ireland to enjoy a 15% treaty tax rate on dividends. The fund manager pays this tax, and then the fund manager reinvests the net dividends (buys more shares for shareholders, to grow the fund). This Irish domiciled fund is not U.S. estate taxable, and Ireland does not have an estate tax.

The preceding two paragraphs may be different if you are a tax resident of some other jurisdiction besides Singapore. U.S. persons, for example, are subject to U.S. tax jurisdiction. (S27 is much better in tax terms for them.)

In my view you shouldn’t be investing in a S&P 500 Index fund at all with the possible exception of planned retirement in the U.S. or in a U.S. dollarized country (country with a currency firmly pegged to the U.S. or that uses the U.S. dollar directly). One could make the argument the S&P 500 Index has a little U.S. dollar affinity, although it’s fading. Instead, stick with a global stock index fund for this leg of your retirement portfolio.

Moreover, for tax optimization reasons your SRS account is not the first place to be investing in any stock index fund. Your SRS account should hold the lowest expected yielding part(s) of your long-term portfolio. For example, if you’re investing a portion of your savings in MBH then let your SRS account hold that while your outside (non-SRS) account focuses on the global stock index fund. If you cannot reach your target stock index fund allocation solely with your non-SRS account then sure, some of your stock index fund allocation may need to be inside your SRS account to meet your desired allocation percentage.

so, for SG citizens based in SG, will the Endowus IE be better than S27 if there is no plan to move/retire in the US?

 

[BBCWatcher]

I'm not sure if the advice makes sense.
It's not as though companies like Apple and Google and Nvidia's shares are worthless in non-US dollars.
Even if US dollars collapse, as long as these companies are hugely profitable, they are still worth something in non-USD.
Maybe explain your thoughts?

It has nothing hugely to do with U.S. dollars or any other currency. Stocks are stocks, not currencies. Although stocks listed/traded on U.S. exchanges have some minor U.S. dollar affinity, one could argue. I think it's a weak argument, but it's an argument.

The bigger issue by far is that, when you filter stocks based on where they happen to trade (where the stock markets are located), that's just plain weird. You shouldn't do that unless there's a really good reason. And there isn't a good reason to favor or disfavor stock markets located in the U.S. versus stock markets located in Toronto, Frankfurt, London, Hong Kong, Tokyo, Shanghai, Sydney, etc., etc. Let the global index figure this out for you! If the next Amazon happens to list in Zurich or Seoul, great! You'll participate with a global stock index fund. If Apple continues to roar ahead (and continues listing/trading on a stock exchange in the U.S.), great! You'll participate with a global stock index fund. If some government changes some regulation that knocks a particular country off the stock market grid (to some degree or to a considerable degree), OK, no problem, you're in the global index. Don't filter unless you've got a damn good reason. Keep it simple, because it is.

so, for SG citizens based in SG, will the Endowus IE be better than S27 if there is no plan to move/retire in the US?

Endowus's S&P 500 Index fund is more tax appropriate for residents of Singapore (who are not U.S. persons). But it's still a S&P 500 Index fund. It's exactly the same basket of stocks in exactly the same proportions. See above.

 

[JuniorLion]

Yes, buying S&P 500 means betting on US.

 

[BBCWatcher]

Yes, buying S&P 500 means betting on US.

No, it doesn't mean that. Let's be precise, because it's important. Investing in a S&P 500 Index fund means betting on the future stock market returns of the top ~505 stocks by market capitalization that are listed/traded on stock exchanges that happen to be located in the United States, and subject to a minor bit of additional S&P filtering. That's a very different bet.

You can't actually "bet on the U.S." except colloquially perhaps, but a S&P 500 Index fund still isn't that. For example, I don't think anybody is offering a bet on the real rate of U.S. Gross Domestic Product (GDP) growth for all of 2025 versus 2024, or on U.S. population growth, or on a happiness measurement of the U.S. population, except perhaps a bookmaker in London. But that bet would be illegal to make under Singapore law if it did exist since it's gambling, not investing or even speculating on securities.

 

[BBCWatcher]

Just as a quick follow up, lots of people in this forum invest in funds like VWRA, ISAC, IWDA, CRPA, IGIL, and others that are listed and traded on the London Stock Exchange. Is this "betting on the United Kingdom"? Or on England? Or on London? Or on The City (a specific part of London)? Or on Ireland, where these funds are typically domiciled? No, of course not. London is just where these securities happen to trade in their primary listings, that's all.

Historically there was much less global trade, telegraphy as the most advanced form of intercontinental telecommunications, and much more localized capital markets. Singtel got 90+% of its revenues from telephone lines in Singapore. McDonald's only had restaurants in the United States. And so forth. We don't live in that world any more. We haven't for decades. Companies legally headquarter essentially wherever they want, raise capital from essentially any stock market, have assets essentially wherever they want, and conduct business essentially wherever they want. Yes, of course, the exceptions and edge cases are interesting. But it's at least very hard for a company to get into the S&P 500 Index without being very international in its real business operations.

We really, really need to get our thinking aligned with the simple realities of global business and capital. For example, Singtel isn't "Singaporean" any more. It's mostly Australian. Thai Beverages, another Straits Times Index (STI) stock, even has another country identifier in its name. That ought to be a clue. Is Dyson British, Singaporean, Malaysian, something else? Yes, and no, and all of the above. It's a multinational company doing real business practically everywhere, with substantial operations in several countries. Who cares where its stock is listed, right?

 

[JuniorLion]

If you are a US citizen, what would you invest in?

 

[CrashWire]

It has nothing hugely to do with U.S. dollars or any other currency. Stocks are stocks, not currencies. Although stocks listed/traded on U.S. exchanges have some minor U.S. dollar affinity, one could argue. I think it's a weak argument, but it's an argument.

The bigger issue by far is that when you filter stocks based on where they happen to trade (where the stock markets are located), that's just plain weird. You shouldn't do that unless there's a really good reason. And there isn't a good reason to favor or disfavor stock markets located in the U.S. versus stock markets located in Toronto, Frankfurt, London, Hong Kong, Tokyo, Shanghai, Sydney, etc., etc. Let the global index figure this out for you! If the next Amazon happens to list in Zurich or Seoul, great! You'll participate with a global stock index fund. If Apple continues to roar ahead (and continues listing/trading on a stock exchange in the U.S.), great! You'll participate with a global stock index fund. If some government changes some regulation that knocks a particular country off the stock market grid (to some degree or to a considerable degree), OK, no problem, you're in the global index. Don't filter unless you've got a damn good reason. Keep it simple, because it is.

Endowus's S&P 500 Index fund is more tax appropriate for residents of Singapore (who are not U.S. persons). But it's still a S&P 500 Index fund. It's exactly the same basket of stocks in exactly the same proportions. See above.

For the benefit of the audience here, I think you should emphasise on "diversification" (I for one would love another perspective on why "diversification is considered the only free lunch in investing") rather than argue against "betting on the US".

 

[JuniorLion]

Exactly. Now, the question is
1) is he a us citizen
2) is he investing in world index fund.

 

[BBCWatcher]

If you are a US citizen, what would you invest in?

U.S. persons (not only U.S. citizens) are subject to U.S. tax jurisdiction, and tax considerations influence investment vehicle decisions, not investment allocation decisions. In short, U.S. domiciled stock funds and bond funds are best for U.S. persons, and non-U.S. domiciled stock funds and bond funds are best for non-U.S. persons. But the underlying investments themselves are identical.

For the benefit of the audience here, I think you should emphasise on "diversification" (I for one would love another perspective on why "diversification is considered the only free lunch in investing") rather than argue against "betting on the US".

I’m not arguing for or against “betting on the U.S.” I am pointing out it’s impossible to bet on the U.S., or on any other country as a country. This isn’t some board game like Risk, or some (illegal) sports betting pool that pays more when a country’s athletes win another medal at the Olympics (which isn’t that representative of a country’s wonderful diversity either). These are decisions about which securities to invest in (or at least speculate in if you choose to do that). Buying shares of Thai Beverages stock isn‘t “betting on Thailand.” (What does that even mean?)

The closest most people can come to betting on a country is to go live there. I live in Singapore.

Exactly. Now, the question is
1) is he a us citizen
2) is he investing in world index fund.

I literally have a whole thread that someone started with my account name in the title, and it has my basic biography at the top. And I explain exactly what I’m doing. Yes, of course I invest (and heavily, too) in a global stock index fund via dollar cost averaging. Am I ”betting on the world” when I do that? No, not actually. I’m betting that the future expected stream of profits of most of the world’s publicly traded corporations will be at least decent. Or, in short, I’m betting on the world’s business enterprise value. That’s a very different bet than betting on the world — a bet that’s unavailable.

Said another way, I encourage you to get out of “Olympic mode” when you’re thinking about investing because it’ll lead you astray. Investing is not some flag waving exercise.

 

[JuniorLion]

What's olympic mode?

 

[BBCWatcher]

Said another way, I encourage you to get out of “Olympic mode” when you’re thinking about investing because it’ll lead you astray. Investing is not some flag waving exercise.

What's olympic mode?

I think we’ve seen a couple good examples over the past few decades: Japan and China. Both are terrific countries in many ways, both with high standards of living, good educational attainment, diverse economies, etc., etc. And way too many people thought, “Oh, these are great countries, so that of course means I should buy stocks that happen to be listed and traded in stock markets in those countries.” Which hasn’t worked out so great, or at least less great. That’s “olympic mode,” conflating a country’s progress with stock selections. Particular stocks do well over the long term when their future expected profits grow. But there are myriad reasons why countries do amazingly well (rising real incomes, rising real standards of living, lower infant mortality, longer life expectancies, greater civil rights, etc.) but corporate profits don’t.

China is a really interesting case. I think you could make a convincing argument that the best performing Chinese stock is…Apple. Olympic mode thinking would never have helped you figure that out, but Apple is probably the most successful company in generating high profits (and future expected profits) based on business activities mostly conducted in China, where the bulk of its manufacturing takes place.

I suppose it is possible to invest in some of those things that make a country great, like lower infant mortality, higher literacy rates, and stronger democratic institutions. But we don’t call that investing. We call that philanthropy, and that’s a different thing. I do some of that, as it happens, and I encourage others to do so. But I certainly don’t expect any personal financial returns from philanthropy. I expect fewer children dying in Ghana, for example.

 

[RedsYWNA]

Hi RedsYWNA,
I'm also comparing the S27 using POEMS and this Endowus iShares US Index Fund (IE) S&P 500.
Their fees are quite close, about 0.36% p.a.
But S27 will still have dividend of 1.2% - 30% tax every year.
So what is the advantage of this Endowus iShares fund?

It was mentioned in the reply you quoted. Haha

No withholding tax with Endowus iShares US Index Fund (IE) S&P 500, which offsets the 0.3% fee charged by Endowus. There's risk with this fund as its synthetic and not physical replication, but i think the risk is manageable.

 

[temasek888]

It was mentioned in the reply you quoted. Haha

No withholding tax with Endowus iShares US Index Fund (IE) S&P 500, which offsets the 0.3% fee charged by Endowus. There's risk with this fund as its synthetic and not physical replication, but i think the risk is manageable.

How does the iShares S&P 500 compares with the Amundi Prime USA fund? the fee is 0.05% vs 0.08% and it allows CPF OA investment