Investing into Global ETFs

[TiedInsurer]

I just started my foray into foreign markets, buying ETFs. The plan right now is to DCA into VWRA, SGD1,000/mth (approx. USD700). I'm using SCB online trading, and they charge me a USD10.70 commission for each trade, meaning approximately 1.5%. Throw in the stamp duties on the trade, and i'm paying 2% in transaction fees on each trade.

That seems a bit high, so i'm considering to put in USD1,400 every 2 months instead, so that my total fees per trade can go down to 1.3%. I'd rather not though, since investing once every 2 months means i won't be tracking the market as closely.

Is there anything else i can do?

*EDIT*: IB is not for me as my portfolio size is small. Think they charge a $10/mth custodian fee.

 

[assiak71]

No stamp duty for lse etf

The scb indicative fee shows stamp duty (from my memory) but actual fees will not have

Wait a while for tiger brokers to see if they add LSE

 

[BBCWatcher]

*EDIT*: IB is not for me as my portfolio size is small. Think they charge a $10/mth custodian fee.

No they don’t. US$10.00 is your total monthly commission in the scenario you describe, currency conversion included. That costs less than Standard Chartered. 70 cents less, plus about 0.4% less for currency.

Standard Chartered only sometimes costs less when you’re doing one buy bimonthy or less often. You don’t like that idea, so IB is for you.

IB doesn’t have a custody fee, which should be clear enough because this fee isn’t called a custody fee. It’s called an “Activity Fee.” At IB you’re charged the monthly Activity Fee OR actual commissions, whichever is higher. The Activity Fee is:

Account holders under age 26: US$3 for total account values under US$100,000, US$0 otherwise

Other account holders: US$20 for total account values under US$2,000, US$10 for total account values of at least US$2,000 and below US$100,000, US$0 for total account values of US$100,000 or higher

 

[TiedInsurer]

No stamp duty for lse etf

The scb indicative fee shows stamp duty (from my memory) but actual fees will not have

Wait a while for tiger brokers to see if they add LSE

Quite sure SCB does charge the stamp duty though? At least, according to my bro who bought VWRD on SCB, 2 years ago.

Thanks, i'll explore this tiger brokers thing.

 

[TiedInsurer]

No they don’t. US$10.00 is your total monthly commission in the scenario you describe, currency conversion included. That costs less than Standard Chartered. 70 cents less, plus about 0.4% less for currency.

Standard Chartered only sometimes costs less when you’re doing one buy bimonthy or less often. You don’t like that idea, so IB is for you.

IB doesn’t have a custody fee, which should be clear enough because this fee isn’t called a custody fee. It’s called an “Activity Fee.” At IB you’re charged the monthly Activity Fee OR actual commissions, whichever is higher. The Activity Fee is:

Account holders under age 26: US$3 for total account values under US$100,000, US$0 otherwise

Other account holders: US$20 for total account values under US$2,000, US$10 for total account values of at least US$2,000 and below US$100,000, US$0 for total account values of US$100,000 or higher

Hmm thanks. Let me revisit this.

 

[limster]

Quite sure SCB does charge the stamp duty though? At least, according to my bro who bought VWRD on SCB, 2 years ago.

Thanks, i'll explore this tiger brokers thing.

Most people will not be able to remember the details of their financial transactions from 2 years ago unless they actually checked his invoice... so chalk it down to your brother not being able to remember clearly.

I doubt your brother checked his invoice/contract note because if he did it will show no stamp duty.

anyway, heres the invoice from my monthly ETF DCA. I am also doing regular S$1k/month DCA of a number of ETFs, which is why i know there's no stamp duty.

 

[CWL84]

If you need a clearer picture of the charges for the amount that you're investing, I recommend using cfleee's spreadsheet:

https://docs.google.com/spreadsheets/d/1BqIhbYNJF7VJbtj6PS08Csbyx1s4vs_03Kvh0pPRUCI/view#gid=0

 

[TiedInsurer]

Most people will not be able to remember the details of their financial transactions from 2 years ago unless they actually checked his invoice... so chalk it down to your brother not being able to remember clearly.

I doubt your brother checked his invoice/contract note because if he did it will show no stamp duty.

anyway, heres the invoice from my monthly ETF DCA. I am also doing regular S$1k/month DCA of a number of ETFs, which is why i know there's no stamp duty.

Sweet. I just asked him for his records. Turns out he still has them, and he really did not get charged the stamp duties.

If you need a clearer picture of the charges for the amount that you're investing, I recommend using cfleee's spreadsheet:

https://docs.google.com/spreadsheets/d/1BqIhbYNJF7VJbtj6PS08Csbyx1s4vs_03Kvh0pPRUCI/view#gid=0

Thanks. This spreadsheet really illustrates BBCWatcher's point that cost savings for SCB only becomes significant at investment intervals of 3 mths or more. However, given that SCB doesn't appear to charge the 0.5% stamp duty.... what about IB? Do they charge the 0.5% stamp duty? Or is it lumped into the minimum commission?

 

[Entry Level PC]

I just started my foray into foreign markets, buying ETFs. The plan right now is to DCA into VWRA, SGD1,000/mth (approx. USD700). I'm using SCB online trading, and they charge me a USD10.70 commission for each trade, meaning approximately 1.5%. Throw in the stamp duties on the trade, and i'm paying 2% in transaction fees on each trade.

That seems a bit high, so i'm considering to put in USD1,400 every 2 months instead, so that my total fees per trade can go down to 1.3%. I'd rather not though, since investing once every 2 months means i won't be tracking the market as closely.

Is there anything else i can do?

*EDIT*: IB is not for me as my portfolio size is small. Think they charge a $10/mth custodian fee.

you can also 12k per year.
one year one time.

transaction/comission fees vs unrealized gain/loss

 

[CWL84]

Sweet. I just asked him for his records. Turns out he still has them, and he really did not get charged the stamp duties.



Thanks. This spreadsheet really illustrates BBCWatcher's point that cost savings for SCB only becomes significant at investment intervals of 3 mths or more. However, given that SCB doesn't appear to charge the 0.5% stamp duty.... what about IB? Do they charge the 0.5% stamp duty? Or is it lumped into the minimum commission?

No stamp duty as well, ibkr only charge a minimum US1.90 (US1.70+0.20 clearing fee) for tiered pricing, that's what I've always been charged when I invest around SGD1k in iwda.

 

[TiedInsurer]

No stamp duty as well, ibkr only charge a minimum US1.90 (US1.70+0.20 clearing fee) for tiered pricing, that's what I've always been charged when I invest around SGD1k in iwda.

Awesome. Thanks for all your input guys.

 

[koonzzyawn]

US shares and ETF charge withholding tax of up to 30% when u sell.better check.

 

[reddevil0728]

US shares and ETF charge withholding tax of up to 30% when u sell.better check.

sell also got 30% WHT? really meh?

 

[limster]

US shares and ETF charge withholding tax of up to 30% when u sell.better check.

Wow, that's very serious. Please go to the USA stocks discussion thread to warn them!

https://forums.hardwarezone.com.sg/...2/usa-stocks-discussion-part-2-a-5900763.html

 

[livingcharsiew]

put into stashaway or syfe with 100% equity
once you have 12k, withdraw and buy with scb
then put into them again
save the commission, the management fee about 0.8% means you only pay $10 per year for $12000 rather than $60 a year with scb buying every 2 months
but you risk withdrawing on a bad day and buying back high

 

[TiedInsurer]

put into stashaway or syfe with 100% equity
once you have 12k, withdraw and buy with scb
then put into them again
save the commission, the management fee about 0.8% means you only pay $10 per year for $12000 rather than $60 a year with scb buying every 2 months
but you risk withdrawing on a bad day and buying back high

If really no commission and all they charge is a 0.8% management fee, why bother shifting to SCB once you have $12k? Might as well continue to hold inside long term? What am i missing?

 

[livingcharsiew]

If really no commission and all they charge is a 0.8% management fee, why bother shifting to SCB once you have $12k? Might as well continue to hold inside long term? What am i missing?

management fee is 0.8% p.a.
if you have 12k its about $10 a year
if you have 24k its $20 a year
this one say wrong ignore this and refer to the table below
you pay about $45 for 1000 deposits per year if you withdraw vs scb 66 usd

they invest in us based etfs so 30% dividend withholding tax instead of 15%
exchange rate with them should be slightly more favorable than scb

when you withdraw your 12k
you dont get charged $10 a year on that 12k (which should be worth more hopefully)
and restart putting your 1k a month so that the management fee apply to your lower balance only

there's probably a breakeven where one is more cost efficient than the other

 

[Barracudaz]

put into stashaway or syfe with 100% equity
once you have 12k, withdraw and buy with scb
then put into them again
save the commission, the management fee about 0.8% means you only pay $10 per year for $12000 rather than $60 a year with scb buying every 2 months
but you risk withdrawing on a bad day and buying back high

Hey I have a similar approach as you. I'm just wondering once you hit the $12k mark, will you be able to withdraw USD12k from stashaway to SCB (USD A/C)? Will there be any fees/cost to it?

 

[livingcharsiew]

Hey I have a similar approach as you. I'm just wondering once you hit the $12k mark, will you be able to withdraw USD12k from stashaway to SCB (USD A/C)? Will there be any fees/cost to it?

not sure if you can withdraw usd from stashaway but scb i think theres no way to deposit usd into their trading account

If really no commission and all they charge is a 0.8% management fee, why bother shifting to SCB once you have $12k? Might as well continue to hold inside long term? What am i missing?

around 11000 sgd is the breakeven when you should switch
difficult to calculate the dividend since they are both accumulated
scb you spend $11 a every 2 month on comms but its usd so will be higher


risks
exchange rate risk
opportunity and timing risk when withdrawing to do a buy in scb

 

[s0crates]

0.8% for 12k is $96 recurring. How is that cheap?

put into stashaway or syfe with 100% equity
once you have 12k, withdraw and buy with scb
then put into them again
save the commission, the management fee about 0.8% means you only pay $10 per year for $12000 rather than $60 a year with scb buying every 2 months
but you risk withdrawing on a bad day and buying back high