Official Shiny Things thread—Part III

[ravenintiate]

hi all anybody tried fund smart on endowus? is doing 85% infinity global and 15% schroder emerging market for cpf any good?

 

[FrostWurm]

California Gov. Gavin Newsom signed legislation Wednesday that will require the boards of publicly traded companies based in the state to have at least one racially, ethnically or otherwise diverse director by 2021.

Left-handers considered as diverse?

 

[yellownova]

Hi all, I have a bunch of noob questions: Can someone explain taxes in IBKR in simple terms?

Does Capital Gain taxes mean, I will be taxed X% on stocks/ETFs that I sell and get money from?

What about dividends? Is that why IWDA, an accumulating ETF is recommended? Does it get taxed in some way?

What about Estate tax? Does this mean I get taxed when I pass away? Does the tax fees get taken from my existing stock? i.e. IBKR sells my stock to pay for the taxes?

If I'm taxed, do I see it in my statements when I sell them? I haven't sold any, so I don't know how this works.

TIA

Sent from Samsung SM-G975F using GAGT

 

[kram62]

Hi all, I have a bunch of noob questions: Can someone explain taxes in IBKR in simple terms?

Does Capital Gain taxes mean, I will be taxed X% on stocks/ETFs that I sell and get money from?

What about dividends? Is that why IWDA, an accumulating ETF is recommended? Does it get taxed in some way?

What about Estate tax? Does this mean I get taxed when I pass away? Does the tax fees get taken from my existing stock? i.e. IBKR sells my stock to pay for the taxes?

If I'm taxed, do I see it in my statements when I sell them? I haven't sold any, so I don't know how this works.

TIA

Sent from Samsung SM-G975F using GAGT

If you are a Singapore resident, there's no capital gain tax.

Dividend withholding tax (WHT) depends on where the fund our stock you buy is listed and domiciled and where you reside (for example, US funds or stocks have 30% WHT, funds like IWDA listed on London stock exchange but domiciled in Ireland benefit from a tax treaty between the US and Ireland and get reduced WHT of 15% instead)

Withholding tax is applied directly at fund level you won't see it in your statements. Doesn't matter if distributing or accumulating, the WHT is applied in both case in the same way. Just that in the first case the dividends are distributed to you and in the other case the exact same amount would be used to buy more shares of underlying assets, making the NAV of the ETF increase.

Estate tax depends on whether you are a US person or not and also on the domicile of the fund. For non US persons, US assets including cash are subject to US estate tax. Up to USD 60,000 are estate tax free. US assets amount above that get tax at different marginal rates.

If you have more questions about tax, engage a professional to advise you as everyone's case might differ depending on various factors.

 

[BBCWatcher]

If you are a Singapore resident, there's no capital gain tax.

There’s no Singapore income tax on non-professional capital gains. Another jurisdiction’s capital gains tax can often apply.

Dividend withholding tax (WHT) depends on where the fund our stock you buy is listed and domiciled and where you reside (for example, US funds or stocks have 30% WHT, funds like IWDA listed on London stock exchange but domiciled in Ireland benefit from a tax treaty between the US and Ireland and get reduced WHT of 15% instead)

Your tax residence(s) matter.

Withholding tax is applied directly at fund level you won't see it in your statements.

That varies.

Estate tax depends on whether you are a US person or not and also on the domicile of the fund. For non US persons, US assets including cash are subject to US estate tax. Up to USD 60,000 are estate tax free. US assets amount above that get tax at different marginal rates.

No, only U.S. estate taxable assets. And plenty of other jurisdictions have estate, inheritance, and or gift taxes.

If you have more questions about tax, engage a professional to advise you as everyone's case might differ depending on various factors.

I like that idea.

 

[lowveld]

Hi folks any thoughts on this new MMF?

https://www.businesstimes.com.sg/companies-markets/phillip-sgd-money-market-etf-debuts-on-sgx-with-initial-aum-of-s100m

 

[BBCWatcher]

Hi folks any thoughts on this new MMF?

Yes: it's currently not particularly useful. It claims to track the 3 month SOR. Let's suppose the 3 month Swap Offered Rate is 17 basis points per annum currently. (About right.) Phillip charges 10 basis points as their management fee, so you'll net about 7 basis points per year, presumably. You then have broker commissions and exchange fees in and out....

....Does this look like something you'd want to bother with?

 

[swan02]

Anyone invests in convertible bonds such as CWB etf ?

what’s your views on this as part of a diversified portfolio?

Looking into equity like bonds and also bond like equities ...please for all to see if any a decent allocation.

 

[dappermen]

Yes: it's currently not particularly useful. It claims to track the 3 month SOR. Let's suppose the 3 month Swap Offered Rate is 17 basis points per annum currently. (About right.) Phillip charges 10 basis points as their management fee, so you'll net about 7 basis points per year, presumably. You then have broker commissions and exchange fees in and out....

....Does this look like something you'd want to bother with?

but Wont ETFs flux and rise?

 

[BBCWatcher]

but Wont ETFs flux and rise?

Short-term commercial paper? No, there's no reason to expect it'd have any long-term appreciation. The ETF's price will wobble a bit, but that's a bad thing, actually. It means you'd be getting a net circa 7 basis points per year (before commissions and exchange fees) and principal risk. Which happens to be the truth, so what useful purpose would this ETF serve for you at the present time?

 

[dappermen]

then what is the purpose of creating this new ETF then??
I have a stashaway account, i trust they are ALL about ETFs, they have a StashAway Simple™: allocates 50% of your assets to the LionGlobal SGD Money Market Fund, and 50% to LionGlobal SGD Enhanced Liquidity Fund SGD Class I Acc.
it earns not too bad interest just like the ENdowUS Cash ...
Maybe it is Money Mkt funds, not ETFs?

hence i m confused why then ETFs?

seemed like ETFs alwys performed better (even though this is no $ mkt etfs)

 

[JadenQ]

No, it wouldn’t make tax filing complicated at all. You’d just inform IB after you move to the U.S., and they’ll probably switch you to IB LLC. The assets are what matter, really.

But is VT the right instrument, and is IB the right broker? For the latter, I’d say yes assuming you switch to IBKR Lite. Then there’s no harm in keeping the account. IB is also terrific if you need to shift some Singapore dollars, although the ICBC Global Travel Mastercard is even more terrific at merchants that accept Mastercard.

For the former (VT), maybe not. You could head over to Fidelity after you arrive and invest in their mutual fund pair FZROX and FZILX. Those are literally zero expense ratio index funds, and the pair of them effectively replicates VT. Granted, you would have to manually rebalance them periodically if you wish to do that, and selling a portion of either is a U.S. taxable event (just as at VT — VT will throw off some taxable capital gains as it rebalances inside the fund, but the fund managers try to minimize that). But you don’t necessarily have to sell either. You could just buy a little more of the laggard and rebalance that way. Also, since they’re mutual funds, you can set them up for regular, automatic monthly purchases. And you can set them up for automatic dividend reinvestments. And you can buy them in specific dollar amounts. OK, yes, ETFs and brokers that handle them are starting to figure out the same mechanisms, but they’re not as highly developed yet.

Yet another choice is Schwab’s “target date” index fund. While they’re designed with a U.S. dollarized retirement assumption, since those are the bonds it buys and gradually moves into as you approach the target retirement age, this still works pretty well if you’re far enough away from retirement and “U.S. retirement curious” (could fall in love with an American). Schwab charges a mere 0.08% expense ratio on these funds, and that’s fabulous. Same deal as Fidelity in terms of mechanics, and Schwab also offers their lovely Visa ATM/debit card. If you open a Schwab account be sure to get the ATM/debit card linked to the brokerage account. Schwab also offers a “Schwab Bank” account with its own ATM/debit card, and it’s fine but not an account you’ll be able to keep if you try to put a non-U.S. mailing address on it. (Alliant Credit Union apparently works better in that respect, also offering a fabulous ATM/debit card.)

This is one of the lovely aspects of a U.S. sojourn, that there are some terrific, free, basic consumer financial products that are good to get and good to keep even after you leave. If you want a fuller list, let me know. And you get a U.S. Social Security Number which is yours for life. (Don’t forget the number, and keep the card in a safe place.)

You’ll also presumably have 401(k), IRA, and 529 account opportunities if/as you wish. These are the major U.S. tax advantaged accounts. I think Singaporeans generally ought to pick Roth 401(k) and Roth IRA variants. Roth 401(k)s aren’t always available, but they’re pretty common. “Roth” means the contributions are after-tax, and qualified withdrawals (minimum age 59 1/2 usually) are U.S. tax free. Dividends, interest, and capital gains in the account are also U.S. tax free if you make only qualified withdrawals. If you’re a non-U.S. person when you make a withdrawal you’ll still be subject to withholding, but you can claw the withholding back in full with a 1040NR tax filing. (And this is one reason why you’ll maintain at least one zero cost U.S. bank or U.S. credit union account, for direct deposit from the IRS.) A Roth 401(k) can be shifted into a Roth IRA after you leave employment, U.S. tax free, and Roth IRAs currently have no Required Minimum Distributions (RMDs), meaning you can leave the funds parked as long as you wish — although you probably don’t want to go too long if you’re a non-U.S. person because these are generally U.S. estate taxable assets. Maybe not, though, if your IRA is shifted to IB and you have IWDA or VWDA inside the IRA by that point in time — I think that’s all possible.

Thanks for the tons of good info! I'll PM you regarding further questions and the full list of consumer financial products

 

[Maeda_Toshiie]

PHILLIP SGD MONEY MARKET ETF

https://www.sgx.com/listing-ceremony/phillip-sgd-mm-etf

 

[ehsevol]

If I wish to switch from buying IWDA to VWRA, would the better thing to do be 1) dispose of IWDA and invest all the cash I get on VWRA (assuming the price of IWDA is decent relative to what I bought them at), or 2) just leave IWDA as they are and continue buying VWRA? Not sure if there are any fee implications that I haven't thought about.

 

[chekseng80]

I would just buy vwra without selling iwda. U may consider selling them during rebalancing thought. Just my thoughr.

 

[highsulphur]

I probably won't sell as well. Just buy vwra going forward

How's the liquidity for vwra compare to iwda? I have just been loading up iwda

 

[chekseng80]

I probably won't sell as well. Just buy vwra going forward

How's the liquidity for vwra compare to iwda? I have just been loading up iwda

Definitely not as liquid as IWDA around 10x diff in vol

 

[MangoTuna65]

If I wish to switch from buying IWDA to VWRA, would the better thing to do be 1) dispose of IWDA and invest all the cash I get on VWRA (assuming the price of IWDA is decent relative to what I bought them at), or 2) just leave IWDA as they are and continue buying VWRA? Not sure if there are any fee implications that I haven't thought about.

I am curious to know, is there a reason to choose one over the other?

 

[highsulphur]

I am curious to know, is there a reason to choose one over the other?

must be for the exposure to emerging markets

 

[Project_Xco]

This article explains all 3 taxes very well.

https://financialhorse.com/withholding-tax/

Hi all, I have a bunch of noob questions: Can someone explain taxes in IBKR in simple terms?

Does Capital Gain taxes mean, I will be taxed X% on stocks/ETFs that I sell and get money from?

What about dividends? Is that why IWDA, an accumulating ETF is recommended? Does it get taxed in some way?

What about Estate tax? Does this mean I get taxed when I pass away? Does the tax fees get taken from my existing stock? i.e. IBKR sells my stock to pay for the taxes?

If I'm taxed, do I see it in my statements when I sell them? I haven't sold any, so I don't know how this works.

TIA

Sent from Samsung SM-G975F using GAGT