FX Risks At present moment, FX hedging is very costly especially for portfolios below S$1m in size. We do not foresee FX hedging cost reducing to a cost-efficient level over the next few years. As and when hedging cost significantly reduces to a cost-efficient level, we will be more than happy to offer FX hedging option to our clients. You may also note that USD and SGD are major currencies and they tend to be relatively more stable compared to other emerging markets currencies. Therefore, while FX risk is material, FX risk is not significant. This is especially so for investors who have a medium to long term investment horizon. For example, the AutoWealth Balanced Portfolio (60% stocks, 40% govt bonds) achieved 15.7% returns net of fees on a USD basis over the last 26 months since inception. The same portfolio achieved 16.4% net of fees on a SGD basis over the same period. Therefore, the difference of 0.7% due to FX impact is relatively small. Tax Implications The U.S. imposes a withholding tax on dividend payments made out of U.S. listed securities. These are automatically deducted at source before the net dividends are credited into the client's custody account in his/her legal name. Despite a relatively higher withholding tax, ETFs listed in the U.S. are still preferred over ETFs listed in other countries like the U.K. after taking into consideration factors including liquidity, bid-ask spread, expense ratio, ETF fund size amongst other factors.