Official Shiny Things thread—Part III

[makav31i]

My apologies. The previous post confused me. I have deleted my comment already.

No worries, it was my mistake as I quoted without explaining clearly which led to the confusion, for that I am sorry...

 

[kram62]

Good evening all,

Firstly thanks Shiny for reply my query on whether DCA into alternate target ETFs every month vs splitting up into smaller portions and getting every target ETF.

I’ve read on Investment Moats that IBKR has opened an office in Singapore. Could any of the pros here explain what would the implications be? From what I gather (not speculating anything, I’ve read it on the other threads):
i) SG account holders would be have their accounts under SG office - what does this mean? Does it mean our stocks are held under a custodian regulated by MAS? I believe many had explained, no matter where your custodian is, even if it goes bust, the procedure is the same whereby a new custodian will be appointed
ii) GST would be charged on the trading fees (for example that 10$ That SCB charge us, 70 cents is GST)

Would the AUM of 100,000$ be in SGD instead?
Does it even matter if I just open an IBKR account now vs when IBKR starts to advertise their services in SG?

Thank you.

Well just by listing those unsubstantiated speculative statements, you still contribute to the speculation.

In short, no one know anything yet, because there has be no official statements from ibkr (as far as I know).

Nonetheless some things are likely (in a HYPOTHETICAL case where they actually end up handling sg customers from a sg office, again this is NOT confirmed at all officially): charging Singapore GST on commissions is likely, and the 100k threshold will likely remain in USD.

BUT for now, no need to speculate, because ibkr has announced nothing of the sort. (that I know of)

 

[BBCWatcher]

Hi, are there any UCITS ETFs that track a world ex-US index, similar to IWDA and VWRA but excluding US? I already have some holdings in US stocks and do not want to overweight US.

I don't think so. There are U.S. domiciled funds in that category such as Vanguard's VEU. Otherwise I think you'd have to assemble it using a small handful of regional funds.

 

[BBCWatcher]

Do US withholding taxes only apply to US stocks or does it include non US stocks in US domiciled funds?

My understanding is that, for non-U.S. persons resident in Singapore (a non-tax treaty country), there's a 30% dividend withholding tax that applies to U.S. domiciled stock funds such as VEU even though the fund doesn't hold any U.S. domiciled assets. The fund itself also pays foreign (non-U.S.) taxes, mostly dividend taxes. In other words, the 30% tax rate is applied to the after-foreign tax dividends, raising the effective dividend tax rate somewhere above 30%.

However, I think you might be able to file IRS Form 1040NR (a non-resident tax return) to claim a foreign tax credit, meaning some money back from the IRS to drop your effective dividend tax rate back down to 30%. Of course that requires some paperwork, and there's a delay.

Also, as with your U.S. stocks, VEU is a U.S. estate taxable asset. Your estate is obliged to file a U.S. estate tax return and pay estate tax within 9 months of your demise, and your estate's executor is the one who does that. U.S. estate tax applies if your total U.S. estate taxable assets have (had) a fair market value of US$60,000 or more. Jointly held U.S. estate taxable assets are ordinarily counted at 100% (not in fractions) for purposes of this calculation. U.S. estate tax rates are progressive, and the tax brackets range from 18% (the first bracket for the increment starting at US$60,000) to 40%. For example, if your total U.S. estate taxable assets are (were) worth US$65,000, then the estate tax owed is 18% of US$5,000, or US$900. The top marginal tax rate of 40% is reached when the U.S. estate taxable portion of the estate is greater than US$1,060,000.

Any questions?

 

[flowerpalms]

Its not difficult at all. You only deal with 3 assets anyway and 2 brokers

POSB RSP or SCB : ES3 + MBH
SCB or IB : IWDA

Every month just punch in calculator and invest.

Dont tell me you buy ES3 in RSP and also in SCB. Thats just gonna mess up ur portfolio allocation

Thank you for the guidance. Just wondering if u guys have portions of ES3/MBH all over the places like FSM RSP and SCB and etc?

I find that quite difficult to manage the portfolio :/

 

[confusedsuitguy]

Has anyone tried the IKBR Android app? It has such a quick and easy currency converter. Does anyone know if it's more expensive than using the Trader Workstation? Because if not, I'm definitely going to use it instead.

 

[tangent314]

Has anyone tried the IKBR Android app? It has such a quick and easy currency converter. Does anyone know if it's more expensive than using the Trader Workstation? Because if not, I'm definitely going to use it instead.

Yes. This is actually the recommended way to convert currency now. Much easier and faster than going through TWS, and it goes through FXCONV.

 

[13luetooth]

May I know how IB charge the trading fees?

I see 3 ways of charging in IB webpage, Teired, Fixed and Free. My guess is that investing on IWDA in LSE would be by Teird charges.

From there onwards, I'm kinda lost.

When I try to do trades, I noticed that they charge a fixed commission fee of 5 USD for up to 10k USD trades and beyond (I didn't test any further).

Am I setting the account correctly?

The best way to convert the currency is as mentioned by tangent314, convert it in the app itself?

 

[makav31i]

Its not difficult at all. You only deal with 3 assets anyway and 2 brokers

POSB RSP or SCB : ES3 + MBH
SCB or IB : IWDA

Every month just punch in calculator and invest.

Dont tell me you buy ES3 in RSP and also in SCB. Thats just gonna mess up ur portfolio allocation

Can show us how you can buy ES3 using POSB Invest Saver?If you are going to buy ES3 and MBH using SCB and you say to use SCB or IB to buy IWDA, why do you even want to open two broker account when you can deal with one which is SCB?

In case you forgot...

I can't believe anyone who can keep regurgitating the same outdated information...

 

[cassowary18]

Its not difficult at all. You only deal with 3 assets anyway and 2 brokers

POSB RSP or SCB : ES3 + MBH
SCB or IB : IWDA

Every month just punch in calculator and invest.

Dont tell me you buy ES3 in RSP and also in SCB. Thats just gonna mess up ur portfolio allocation

Stop regurgitating outdated info. You're misleading poor newbies who come in here and get confused all the time.

13luetooth, feel free to PM me and I can tell you why the strategy of splitting your investment into your local and overseas components, and using FSMOne RSP to buy your local component and IBKR to buy your overseas component is a superior and more cost effective method.

 

[kram62]

May I know how IB charge the trading fees?

I see 3 ways of charging in IB webpage, Teired, Fixed and Free. My guess is that investing on IWDA in LSE would be by Teird charges.

From there onwards, I'm kinda lost.

When I try to do trades, I noticed that they charge a fixed commission fee of 5 USD for up to 10k USD trades and beyond (I didn't test any further).

Am I setting the account correctly?

The best way to convert the currency is as mentioned by tangent314, convert it in the app itself?

No you have to go to the account management page and change your fee structure from fixed (default value when account is opened) to tiered.

Only after that you'll see that your commission fees are lower (about 1.91 usd for buying small amounts iwda on LSE for example) (note: need to wait until next working day for the change to apply)

Yes converting currency in the app is good. Same cost as using the traditional way, just easier to use, so why not using it (I always do).

 

[lowveld]

Hi ST,

I am receiving margin and liquidation warnings on my account but if my trades are all paid up in full I needn't worry right?

Many thanks!

 

[sunbox]

Yes. This is actually the recommended way to convert currency now. Much easier and faster than going through TWS, and it goes through FXCONV.

I am on IOS and it seems for me it goes through IDEALPRO which is not recommended.

 

[lowveld]

No you have to go to the account management page and change your fee structure from fixed (default value when account is opened) to tiered.

Only after that you'll see that your commission fees are lower (about 1.91 usd for buying small amounts iwda on LSE for example) (note: need to wait until next working day for the change to apply)

Yes converting currency in the app is good. Same cost as using the traditional way, just easier to use, so why not using it (I always do).

Thanks for your help in the other thread - do u use the app to place trades too? Was playing around with the app and it’s actually much easier to use than TWS!

 

[lowveld]

I am on IOS and it seems for me it goes through IDEALPRO which is not recommended.

Thanks for the tip. I’m on iOS too. How do u tell it goes thru IDEALPRO tho?

 

[kram62]

Thanks for your help in the other thread - do u use the app to place trades too? Was playing around with the app and it’s actually much easier to use than TWS!

Yes, I started initially with TWS, but now I only use the app which is very convenient, easier and faster to use for simple things like converting currency and placing simple orders. I also like the easy access to graphs.

Basically for my simple use case of monthly buying some shares, the app is perfect and TWS adds no value.

(using android)

 

[kram62]

Thanks for the tip. I’m on iOS too. How do u tell it goes thru IDEALPRO tho?

You can see it in the trade confirmation. For example on android I get this

Note: the 2.71 commission is actually expressed here in SGD. It was confusing at first but that's how it is. It correctly corresponds to 2 USD at that time...

OT: ah the good old days of 1 usd at 1.35 sgd, just 3 months ago :'-(

 

[13luetooth]

No you have to go to the account management page and change your fee structure from fixed (default value when account is opened) to tiered.

Only after that you'll see that your commission fees are lower (about 1.91 usd for buying small amounts iwda on LSE for example) (note: need to wait until next working day for the change to apply)

Yes converting currency in the app is good. Same cost as using the traditional way, just easier to use, so why not using it (I always do).

Thanks. IBKR seems to be complicated to set it up.

So it will charge 0.08% trading fees per trade and a monthly maintenance fee of 10 USD f the account is under 100k USD?

 

[kram62]

Thanks. IBKR seems to be complicated to set it up.

So it will charge 0.08% trading fees per trade and a monthly maintenance fee of 10 USD f the account is under 100k USD?

Not "and" and it's not a maintenance fee. The fees and commissions paid offset the minimum activity fee.

Say you already paid 6 usd commissions in a month from your orders. The min activity fee will only be 4 usd to reach the min total of 10 usd.

 

[MichealScott]

Saxo isn't good for IWDA because of the custodian fee. If you're planning to use it for local ETFs, fine (because they don't charge custodian for local stocks). But it's generally a bad idea to use Saxo for international ETFs.

Use Standard Chartered instead.

Thank you for your response. Just a thought on my mind that using IBKR actually is risky as they have monthly maintenance fees and if you happen to lose your job or income got cut and unable to continue DCA every month, you are in a pretty bad position. Any thoughts on this?