Can someone give any advises about investing into S&P 500 ETF?

Hi, I am new to investing, I have been reading many of the questions here and the articles and I am kind of confused.

I would like to know the pros and cons between buying S&P 500 ETF from
1) London Stock Exchange
2) Irish domiciled ETF

I know for 2), the withholding tax is 15% compared to buying directly from US 30% but what is the different between that and LSE, since LSE has no tax (due to tax treaty)?

Also how would one go about investing into LSE ETF? Thanks and take care

Discussion (6)

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Frankie Rappaport

05 May 2020

Hi, good choice, but keep things simple.

Ticker VUSA, buy it via Your Singapore online broker, Buy&Hold strategy.

Have Patience.

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Wrong Sean

05 May 2020

Domicile means the ETF is considered under the jurisdiction of Ireland. Usually for tax purposes.

LSE is the stock exchange where the ETF is listed for trading. Think of it like an online marketplace, your company can be based in SG but you sell your stuff in another country(s).

As Ireland has a tax treaty with US, the withholding tax on dividends from US stocks is 15%. As Ireland has a tax treaty with SG, the withholding tax on dividends from the Ireland domiciled ETF is 0%. United Kingdom does not have withholding tax on dividends . Hence net net is 15% withholding tax on your dividends from the US stocks.

That is one big pro. Another is the price of the LSE listed ETFs could be lower than those of US ETFs. Could be a lower barrier to entry.

Cons are the ETFs listed on LSE might have lesser liquidity due to their size and trading activity. Another is the expense ratio of the ETFs can be higher than those in US.

To invest in LSE, you need to open an account with a stock brokerage that provides trading access to that stock exchange. There are some recommendations in Seedly-verse. Do look out for fees like commission fee, custody fee, dividend fee etc.

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