Charles Schwab platform for ETF?

[bei_ge_wang]

Hi all, pursuant to previous thread i had about investing via ETF versus UT.. I am considering taking on a balance approach by having some ETF exposure, in addition to my current UTs portfolio..

I have done some research and seems like for ETFs the abovementioned platform is best in terms of low cost/fees and wide range of ETFs..

They require USD25k as initial deposit to even open the account. Can i open on the US side and then trade from there? This is to avoid having to commit such a lump sum as i want to test use the platform before deciding to commit further..

Otherwise, which other ETF platforms would you all recommend?

Key:
Free (or low cost) buy-in
Minimal ongoing charges
Wide range of ETF instruments from all exchanges



Thank you all for the wonderful sharing thusfar, much appreciations!

 

[BBCWatcher]

I have done some research and seems like for ETFs the abovementioned platform is best in terms of low cost/fees and wide range of ETFs..

Not necessarily.

If you are a non-U.S. person and a resident of Singapore (or a resident of most other countries), the dividends on your U.S. securities are generally subject to 30% tax withholding. That contrasts with many compositionally similar ETFs that are Irish domiciled and London traded that qualify for 15% tax withholding, the U.S.-Ireland treaty rate. The Irish domiciled ETFs are also U.S. estate tax exempt.

If you are a U.S. person, the Schwab U.S. ETFs are fantastic, yes.

They require USD25k as initial deposit to even open the account.

Yes, I'm afraid so. Schwab used to operate OptionsXpress in Singapore with a lower initial deposit requirement, but now it's all Schwab branded with the higher threshold to open.

Can i open on the US side and then trade from there?

Not as a resident of Singapore, no. If you are a U.S. resident, or a resident of particular other countries (not Singapore), then you can open either a U.S. Schwab One (domestic) account or a Schwab (U.S.) One International account. Residents of Singapore can only open a Schwab (Singapore) One International account. There are slightly different rules, including minimum account opening amounts. (U.S. residents can open a Schwab account for $1. Aren't they lucky?)

Schwab is not very good if you want to invest in the more tax efficient ETFs traded in London. The minimum commission for such trades is US$100 at Schwab, and it's only available with a phone call to a broker.

Otherwise, which other ETF platforms would you all recommend?

Interactive Brokers if you like the Irish domiciled London traded ETFs, e.g. VWRL and IWDA. There's a US$10 minimum monthly commission charge for accounts valued under US$100,000 (US$25 below US$2,000), starting 3 months from account opening. You can get a demonstration account without any deposit. I think they're probably the "general" winner right now. However, Schwab Singapore is usually very good if you are either a U.S. person or if you want to buy individual U.S. stocks.

 

[bei_ge_wang]

Thanks for your reply, bbcwatcher..

Regarding the witholding tax, doesn't it affect every other platforms that distribute US-domiciled products too?

Thanks for your lengthy insightful reply! Appreciated ~

 

[zumaba]

Interactive Brokers if you like the Irish domiciled London traded ETFs, e.g. VWRL and IWDA. There's a US$10 minimum monthly commission charge for accounts valued under US$100,000 (US$25 below US$2,000), starting 3 months from account opening. You can get a demonstration account without any deposit. I think they're probably the "general" winner right now. However, Schwab Singapore is usually very good if you are either a U.S. person or if you want to buy individual U.S. stocks.

Can use SCB trading platform to buy? no good?

 

[BBCWatcher]

Regarding the witholding tax, doesn't it affect every other platforms that distribute US-domiciled products too?

Yes.

There's one difference in U.S. estate tax treatment. If it's a U.S. broker, cash (in any currencies) is subject to the U.S. estate tax and is counted toward the US$60,000 exclusion applicable to non-U.S. estates. If it's a non-U.S. broker, the cash is not counted toward the exclusion. But otherwise the assets are either U.S. estate taxable or not.

 

[BBCWatcher]

Can use SCB trading platform to buy?

You can, but I'd do a careful cost comparison based on your purchase levels, trading, currency conversions, redemptions, how you value SIPC protections and U.S. estate tax differences, etc. Either Interactive Brokers or Standard Chartered could win that head-to-head contest.

 

[Mecisteus]

It is has been discussed many times. SCB and IB are the 2 most preferred brokerage accounts for our local context.

 

[bei_ge_wang]

It is has been discussed many times. SCB and IB are the 2 most preferred brokerage accounts for our local context.

oh i didn't know SCB can trade ETFs..

great thanks!

 

[revhappy]

Using SCB, you can access the following stock exchanges/markets: US, UK, Germany, HK, Japan. (what else did I miss?)

If you are priority banking customers, there is no min commission (good for DCA), and brokerage rate is not much difference from the other brokerages.

Switzerland, Netherlands, Australia.

Sent from Xiaomi REDMI NOTE 4 using GAGT

 

[zumaba]

Interactive Brokers if you like the Irish domiciled London traded ETFs, e.g. VWRL and IWDA. There's a US$10 minimum monthly commission charge for accounts valued under US$100,000 (US$25 below US$2,000), starting 3 months from account opening. You can get a demonstration account without any deposit. I think they're probably the "general" winner right now. However, Schwab Singapore is usually very good if you are either a U.S. person or if you want to buy individual U.S. stocks.

But I checked the NASDAQ ETF QQQ & TQQQ price performance are far much better than VWRL or IWDA. Why do you recommend to buy VWRL or IWDA? More safe?

Anyway I am a newbie to ETF.

 

[BBCWatcher]

But I checked the NASDAQ ETF QQQ & TQQQ price performance are far much better than VWRL or IWDA. Why do you recommend to buy VWRL or IWDA? More safe?

I’m not necessarily recommending anything, but you’ve picked some very different funds.

QQQ is based on a completely different, narrower and smaller index, the NASDAQ-100, which consists of the largest non-financial companies listed in the U.S. NASDAQ exchange. TQQQ is a leveraged version, designed to amplify QQQ (in both directions). Yes, of course, they’re much riskier bets. They’ve also appreciated significantly in the current U.S. bull market. For perspective, the NASDAQ-100 hit its previous all-time high in 2000. It took just over 17 years to recover, to pass its 2000 peak only a few months ago.

If you’re interested in buying QQQ only now, that’s...interesting. More seriously, fund picking is at least somewhat more complicated than just scanning fund listings and looking for the ones that have gotten more expensive lately. Don’t make your fund buying decisions that way.

There are some other differences beyond composition. QQQ and TQQQ are U.S. domiciled funds. For non-U.S. persons they are subject to 30% withholding on dividends. The Irish domiciled funds are subject to 15% withholding on dividends. These are also quite different bets in terms of the dividend yields. QQQ currently has a dividend yield of about 0.83% (pre-tax), and VWRL is at about 1.7% (also pre-tax). Thus, for every $1 of net QQQ dividends, VWRL throws off about $2.49 of net dividends (at current valuations, as I write this). Finally, QQQ and TQQQ are subject to the U.S. estate tax, to my knowledge. VWRL and IWDA, and their currency siblings, are not.

If you like QQQ, and if you are a non-U.S. person, then you might consider CNDX, traded on the London Stock Exchange. CNDX is also based on the NASDAQ-100.

 

[zumaba]

thanks so much for your enlightenment.

I’m not necessarily recommending anything, but you’ve picked some very different funds.

QQQ is based on a completely different, narrower and smaller index, the NASDAQ-100, which consists of the largest non-financial companies listed in the U.S. NASDAQ exchange. TQQQ is a leveraged version, designed to amplify QQQ (in both directions). Yes, of course, they’re much riskier bets. They’ve also appreciated significantly in the current U.S. bull market. For perspective, the NASDAQ-100 hit its previous all-time high in 2000. It took just over 17 years to recover, to pass its 2000 peak only a few months ago.

If you’re interested in buying QQQ only now, that’s...interesting. More seriously, fund picking is at least somewhat more complicated than just scanning fund listings and looking for the ones that have gotten more expensive lately. Don’t make your fund buying decisions that way.

There are some other differences beyond composition. QQQ and TQQQ are U.S. domiciled funds. For non-U.S. persons they are subject to 30% withholding on dividends. The Irish domiciled funds are subject to 15% withholding on dividends. These are also quite different bets in terms of the dividend yields. QQQ currently has a dividend yield of about 0.83% (pre-tax), and VWRL is at about 1.7% (also pre-tax). Thus, for every $1 of net QQQ dividends, VWRL throws off about $2.49 of net dividends (at current valuations, as I write this). Finally, QQQ and TQQQ are subject to the U.S. estate tax, to my knowledge. VWRL and IWDA, and their currency siblings, are not.

If you like QQQ, and if you are a non-U.S. person, then you might consider CNDX, traded on the London Stock Exchange. CNDX is also based on the NASDAQ-100.

 

[final1]

Hi all, pursuant to previous thread i had about investing via ETF versus UT.. I am considering taking on a balance approach by having some ETF exposure, in addition to my current UTs portfolio..

I have done some research and seems like for ETFs the abovementioned platform is best in terms of low cost/fees and wide range of ETFs..

They require USD25k as initial deposit to even open the account. Can i open on the US side and then trade from there? This is to avoid having to commit such a lump sum as i want to test use the platform before deciding to commit further..

Otherwise, which other ETF platforms would you all recommend?

Key:
Free (or low cost) buy-in
Minimal ongoing charges
Wide range of ETF instruments from all exchanges



Thank you all for the wonderful sharing thusfar, much appreciations!

Recommend TDAmeritrade.
https://www.tdameritrade.com.sg

You can fund the account with US$10k and you will get 25 free trades valid for 60 days. i.e. you can buy your ETFs for free for 60 days 25 times. After 60 days, its US$9.95 flat rate per trade.

But, they do US markets only. Its frankly, good enough for me because the US market is so huge.

No ongoing fees as you requested.

Interactive brokers is another recommended one but it has ongoing fees unless you have a "large" sum as other posters stated.

They also have a practise platform if you want to try before committing.
Their platform is one of the best i have seen for retail investors and its free.
Real time US market data is free too.

 

[BBCWatcher]

Recommend TDAmeritrade.

I don't.

There are at least a few problems with TD Ameritrade Asia. First, you can only buy U.S. listed securities. If you are a non-U.S. person that's fine if you want to buy individual U.S. listed stocks, but it's not tax optimal if you want to buy funds. Second, to my knowledge TD Ameritrade Asia has no local custodial bank account in Singapore, so your currency conversion and fund transfer costs are likely to be high. Third, after the free trades you're charged a flat US$10.65 per trade (presumably US$9.95 plus 7% GST), and that's double what Charles Schwab charges, as an example.

Other than the lower minimum account balance to open, as far as I can tell TD Ameritrade Asia loses every point of comparison with Charles Schwab Singapore. And I'm not necessarily recommending Schwab Singapore. Interactive Brokers is often quite compelling, as another example.

 

[final1]

He can buy for free 25 times which was one of TS's requirements. After that, he can hold it in the account without ongoing custody charges

There is no broker that will give him free trades forever. But, there is 1 that will give him free trades for a limited time.

Its up for him to decide. Its just a recommendation.

 

[bei_ge_wang]

Thanks all for the great recommendations for ETF providers, sincerely appreciated!!