VOO CSPX WHICH ONE PLEASE HELP

[cowtouncil]

Hi guys, I am deciding whether to DCA 800 SGD into CSPX or VOO. So the pros of the cspx most probably is the 15% tax as compared to VOO 30% tax. However, VOO allows DCA into fractional shares as compared to CSPX on IBKR. So I am thinking whether is it worth it to DCA into VOO even though it has higher tax. Please give me some enlightenment.

 

[reddevil0728]

There is also estate tax you need to take note of for VOO.

don't have to zhun zhun dca 800 right. can always accumulate and by the next time

 

[sohguanh]

Hi guys, I am deciding whether to DCA 800 SGD into CSPX or VOO. So the pros of the cspx most probably is the 15% tax as compared to VOO 30% tax. However, VOO allows DCA into fractional shares as compared to CSPX on IBKR. So I am thinking whether is it worth it to DCA into VOO even though it has higher tax. Please give me some enlightenment.

Typically for US listed ETF got 30% dividend tax and estate tax. If you are fine with all these then US fractional shares availability is a big attraction. In case you narrow down to just US listed ETF, there are VOO IVV SPY total 3 but there are a few others you can research.

 

[hyperfuse]

CSPX!

But that's because I follow some bloggers and youtubers.

 

[cowtouncil]

There is also estate tax you need to take note of for VOO.

don't have to zhun zhun dca 800 right. can always accumulate and by the next time

But the issue is, CSPX later get more expensive then my DCA is not consistent which causes it to be not DCA anymore haha

 

[BBCWatcher]

VOO has a total (fund) expense ratio of 0.03%, and CSPX has a total expense ratio of 0.07%. VOO has an additional tax drag that's currently equivalent to about 25 basis points, so it's really a ~0.28% fund versus 0.07% for CSPX. CSPX wins this contest. CSPX is also an accumulating fund, meaning the fund manager immediately reinvests all net dividends. That's more efficient than VOO which has to distribute dividends then, maybe, the broker can arrange reinvestment. (Or, if not, you have to.)

...But why are you considering either VOO or CSPX? Wouldn't a global stock index fund make more sense? The popular examples are VWRA, ISAC, and SWRD. Here are the current approximate share prices of these funds:

VWRA: US$101.82
ISAC: US$65.02
SWRD: US$28.09

So if you want the lowest share price then SWRD wins, and it has a 0.12% expense ratio. If you feel you need stocks listed in "emerging market" exchanges — something you didn't think was necessary when considering VOO or CSPX, let's bear in mind — then ISAC wins (0.20% expense ratio). If you feel you need more mid-cap stocks then VWRA wins since it digs a little deeper into smaller stocks than ISAC does.

Then, at a S$800/month pace, if you'd like to reduce commission costs (currency conversion, stock purchase) you can "batch up" your buys into (for example) bimonthly (once every 2 months) buys of S$1,600 each. At a US$28.09 (for example) share price, or even higher, fractional shares aren't going to add much value at all. Because on average you'll only be dragging about US$14 of "excess" cash at the current price of SWRD.

 

[reddevil0728]

But the issue is, CSPX later get more expensive then my DCA is not consistent which causes it to be not DCA anymore haha

if price increase is good thing ma. then u just buy lesser units lor.

and ur income will also increase so that you can DCA more ma

 

[sohguanh]

and ur income will also increase so that you can DCA more ma

Not sure if you work before but in current climate just to hang on to a job without pay cut is blessing. For some getting a job itself is already a challenge. Of cuz if you are in a good industry income increase is logical. Nowadays getting retrench is the norm rather than exception especially when COVID strike. It seem to recover but not out of safety zone yet

 

[reddevil0728]

Not sure if you work before but in current climate just to hang on to a job without pay cut is blessing. For some getting a job itself is already a challenge. Of cuz if you are in a good industry income increase is logical. Nowadays getting retrench is the norm rather than exception especially when COVID strike. It seem to recover but not out of safety zone yet

Well if you don’t fall into that category where yearly increment is almost expected, then maybe don’t do this lor

 

[gq.ong88]

VOO has a total (fund) expense ratio of 0.03%, and CSPX has a total expense ratio of 0.07%. VOO has an additional tax drag that's currently equivalent to about 25 basis points, so it's really a ~0.28% fund versus 0.07% for CSPX. CSPX wins this contest. CSPX is also an accumulating fund, meaning the fund manager immediately reinvests all net dividends. That's more efficient than VOO which has to distribute dividends then, maybe, the broker can arrange reinvestment. (Or, if not, you have to.)

...But why are you considering either VOO or CSPX? Wouldn't a global stock index fund make more sense? The popular examples are VWRA, ISAC, and SWRD. Here are the current approximate share prices of these funds:

VWRA: US$101.82
ISAC: US$65.02
SWRD: US$28.09

So if you want the lowest share price then SWRD wins, and it has a 0.12% expense ratio. If you feel you need stocks listed in "emerging market" exchanges — something you didn't think was necessary when considering VOO or CSPX, let's bear in mind — then ISAC wins (0.20% expense ratio). If you feel you need more mid-cap stocks then VWRA wins since it digs a little deeper into smaller stocks than ISAC does.

Then, at a S$800/month pace, if you'd like to reduce commission costs (currency conversion, stock purchase) you can "batch up" your buys into (for example) bimonthly (once every 2 months) buys of S$1,600 each. At a US$28.09 (for example) share price, or even higher, fractional shares aren't going to add much value at all. Because on average you'll only be dragging about US$14 of "excess" cash at the current price of SWRD.

Any difference in the USD denominated and the GBP denominated (SWLD, SSAC, VWRP) , apart from FX risk. USD seems q high compared to GBP all time low.

 

[reddevil0728]

Any difference in the USD denominated and the GBP denominated (SWLD, SSAC, VWRP) , apart from FX risk. USD seems q high compared to GBP all time low.

which currency do you prefer to hold?

 

[gq.ong88]

which currency do you prefer to hold?

Which currency will strengthen to SGD long term?

 

[reddevil0728]

Which currency will strengthen to SGD long term?

nobody got a crystal ball and SGD is against a basket of currencies.

but for now USD remains the reserve currency...

 

[Mephist0pheLes]

Hi guys, I am deciding whether to DCA 800 SGD into CSPX or VOO. So the pros of the cspx most probably is the 15% tax as compared to VOO 30% tax. However, VOO allows DCA into fractional shares as compared to CSPX on IBKR. So I am thinking whether is it worth it to DCA into VOO even though it has higher tax. Please give me some enlightenment.

Cspx incurs higher min comm also, have to take that into account, since ur monthky investment amount is relatively low.

U may consider buying voo on a monthly basis, then sell the accumulated amount and buy cspx after every 12 or 18 months. This way, u can do ur dca more effectively and save some commissions

 

[BBCWatcher]

Any difference in the USD denominated and the GBP denominated (SWLD, SSAC, VWRP) , apart from FX risk. USD seems q high compared to GBP all time low.

Which currency will strengthen to SGD long term?

I think you fundamentally misunderstand currencies. Imagine buying something else that’s globally traded, like oil from a market in London (whatever that market is). The oil market will quote you the current price in U.S. dollars, British pounds, euro, Japanese yen, and Swiss francs let’s suppose. You happen to have some yen, so you buy 100 barrels of oil using your yen.

OK, so now you own 100 barrels of oil. Are you taking any Japanese yen currency exchange risks because you happened to use yen to buy your oil? No, of course not. You no longer have yen, not those yen anyway. You have 100 barrels of oil, so you’re taking oil risk.

The same is true of stocks and stock funds. Once you buy the stock(s) you no longer hold whatever currency you used to buy them. You EXIT currency risks (the direct currency risks anyway) and enter stock(s) risks. The fact the stock fund might be listed in multiple currencies doesn’t fundamentally matter. Whatever currency you use (South African rand?) you’re still buying exactly the same stocks if it’s the same fund but only an alternate currency listing.

Which currency listing should you use? Well, I kind of answered it. If you happen to have and/or are receiving a particular currency and want to use that currency to buy whatever you’re buying (and can), great, use that currency. Otherwise, use the U.S. dollar listing since that’s by far the world’s most popular conversion currency.

 

[cowtouncil]

Cspx incurs higher min comm also, have to take that into account, since ur monthky investment amount is relatively low.

U may consider buying voo on a monthly basis, then sell the accumulated amount and buy cspx after every 12 or 18 months. This way, u can do ur dca more effectively and save some commissions

which means for now I buy VOO, then every 12/18months I sell and pump into cspx?

 

[reddevil0728]

which means for now I buy VOO, then every 12/18months I sell and pump into cspx?

Yes. That’s a possible approach

 

[bruce787816]

Endowus is offering S&P500 via Lion Global in SGD which is a feeder fund? What’s the difference between buying feeder fund and invest direct into similar Ireland domiciled S&P, besides the currency risk?

 

[tangent314]

Endowus is offering S&P500 via Lion Global in SGD which is a feeder fund? What’s the difference between buying feeder fund and invest direct into similar Ireland domiciled S&P, besides the currency risk?

Currency risk is the same since the fund isn't hedged - LG just takes care of the currency conversion for you.
You pay annual platform fee to use Endowus and significantly higher TER on the LG fund.