How do I calculate the Total Expense Ratio for ETFs listed in the US, including withholding taxes? Is there a formula for this?

For example, if the TER of an ETF domiciled in the US is 0.07%, and dividends are taxed at 30%, how should I include this into the calculation to get the true TER of the ETF for me? Is it also possible to factor in other costs, like bid-ask spread ratios, and if this information is readily available in the Funds' factsheets? Thank you! :)

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Frankie Rappaport

17 Feb 2020

The dividends and the TER are completely different things.

The TER is deducted every day pro rata, but you won't see that, it is integrated by the ETF company into the NAV.

The taxing of the dividends is done on the pay out date(s) and deducted automatically by your broker and transferred to the IRS.

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Jonathan Chia Guangrong

04 May 2019

SOC at Local FI

I think it's unrealistic to have this information in the fund factsheet. These are ETFs, traded on a stock exchange so the bid offer spreads can be very dynamic. Dividends declared may vary also so you will need to manually track your returns I'm afraid.

If withholding tax is a concern, consider robo advisories. Some may be able to claim this back from what I hear.

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