Amos

06 Apr 2021

∙

General Investing

I am a passive investor and dollar cost average monthly. I regularly invest into ETFs such as the S&P 500 / Nasdaq 100. However, a 30% withholding tax on US domiciled dividends can eat into my returns?

However buying Ireland domiciled ETFs listed in the London stock exchange, I will incurred a higher commission fee charged by my brokerage platform. As I invest monthly and dollar cost average, this higher commission fee charged by my broker will also eat into my returns over the long run. Is anyone facing such dilemma and what's the best option to maximize returns in the long run (ie 20-30 years)?

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Chris

06 Apr 2021

Owner and Writer at Tortoisemoney.com

Actually for Nasdaq-100, since the dividend paid is much lower, investing in the US version (QQQM) is lower cost than investing in the LSE variant due to the lower expense ratio on the ETF.

For the S&P500 ETF, you can choose to DCA less frequently to bring down overall costs. Alternatively, if the cost savings are significant, you can just continue investing the US ETF and allow the loss on dividends to be balanced off by the comms differences.

P.s. just curious, what broker are you on?

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