Index Fund Portfolio Recommendation - US vs. Ireland Domicile

All 3 portfolios look highly diversified because they're all composed of broad market ETFs. Without looking specifically into each one, if I had to pick then I would instinctively pick the first as it would be easier to manage. I would probably rather just have 50% 1 US broad market ETF + 40% 1 emerging market broad market ETF + 10% 1 thematic play. I also prefer to focus my portfolio on a specific goal, hence I have 1 growth portfolio and 1 income portfolio optimized for yield. Trying to mix both strategies may not deliver the best outcomes for either? I have no data on that, so just an assumption.

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Bonds?

I would not bother with bonds at all. Yields are below inflation. Given how diversified those equity ETFs are, you're sufficiently de-risked that you shouldn't need bonds as a hedge.

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US-Domiciled?

TL;DR - I don't think it matters too much. If the fund is heavily income-focused, I would be inclined to go for a non-US-domiciled fund, especially if the expense ratio is low. If the expense ratio is high (.7%) and the yield quite low (<3%) then I might just go for the US-domiciled fund anyway.

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Let's assume you have a growth ETF and the fund value has appreciated by 12% in 1 year, and the yield is 1%. The expense ratio for the US-domiciled fund is 0.3% and the expense ratio for its Irish-domiciled equivalent is 0.7%. Your total return is growth - fees + (dividend - withholding tax).

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The growth fund - high appreciation, low yield.

• For the US-domiciled fund, your total return is 12% - 0.3% + (1% x (100% - 30%)) = 12.4%
• For the Irish-domiciled fund, your total return is 12% - 0.7% + (1% x (100% - 15%)) = 12.15%

In this scenario, you would have got a bigger snowball rolling on the US-domiciled fund, despite the higher withholding tax, because the expense ratio is lower and value appreciation makes up a larger portion of total return..

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Now let us assume the fund strategy is income. The ETF has not appreciated at all (0%) in the past year. It's delivered a 3% yield. The expense ratios and taxes remain the same as before.

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The income fund - low appreciation, high yield.

• For the US-domiciled fund, your total return is 0% - 0.3% + (3% x (100% - 30%)) = 1.8%
• For the Irish-domiciled fund, your total return is 0% - 0.7% + (3% x (100% - 15%)) = 1.85%

The non-US domiciled fund wins because we're counting on the dividend for return, and the withholding taxes are lower.

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Now let us assume the same, except the yield is lower... just 1%.

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The crap fund - low appreciation, low yield.

• For the US-domiciled fund, your total return is 0% - 0.3% + (1% x (100% - 30%)) = 0.4%
• For the Irish-domiciled fund, your total return is 0% - 0.7% + (1% x (100% - 15%)) = 0.15%

Now the US-domiciled fund makes the most sense because the fee + tax is overall lower than for the other fund.

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And finally, the hidden gem - high appreciation, high yield.

• For the US-domiciled fund, your total return is 12% - 0.3% + (3% x (100% - 30%)) = 14.07%
• For the Irish-domiciled fund, your total return is 12% - 0.7% + (3% x (100% - 15%)) = 13.85%

Again, the appreciation makes up the majority of the total return, so we should care more about the fees and not the withholding tax. So we can see that in some cases, buying the US-domiciled fund could make the most sense, depending on the fees and expected total return.

Yes they are subjected to withholding taxes. Investing in US growth ETFs will be the way as dividends will not be the focus so the taxes are negligible.

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As for dividends, sgd dividend pot will be the way.