Asked on 19 Apr 2020
Would it make sense to invest in CSPX instead of VOO due to withholding tax of 30%? Or would the high liquidity of VOO outweigh the cons of the withholding tax implications? Also, as I'm only interested in the capital appreciation, would i be able to select an ETF that tracks the S&P 500 AND reinvests the dividends, therefore avoiding withholding tax altogether? As I understand it, Singaporeans do not need to pay on capital gains tax. Thanks for your help! Michelle.
I would start with a broader index, that tracks not just the US markets, but the global index. including other developed markets and emerging markets.
VWRA/VWRD serves the purpose, and it is tax efficient. US listed is extremely bad because you are potentially paying 2 layers of dividend withholding taxes.
You can read up more about it here:
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S&P 500 is a good choice. You can try Interactive brokers for Ireland domiciled S&P500 ETF.
Whether the 30% are relevant depends a bit on the total sums invested from a pragmatic view.
CSPX and VUSA should be liquid enough.
TD Ameritrade (among probably others) would let You reinvest dividends of ETFs free of charge:
The physically (important !) replicated 'accumulating' ETFs for SP500 would be:
VUAG or VUAA: Vanguard S&P 500 UCITS ETF (USD) Accumulating ISIN IE00BFMXXD54
CSPX pr CSP1: iShares Core S&P 500 UCITS ETF (Acc) ISIN IE00B5BMR087
Both are very cheap: TER = 0.07% per year
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I think there’s already some great answers here but I will like to add on one thing. Even if you choose an ETF that reinvest, the withholding tax still applies. It can’t be avoided this way.
S&P500 is a great choice, Warren Buffett himself recommends it.
The 30% tax is only on dividends, not capital gain which is not much when investing in assets that are primarily focused on capital gains.
While the rest focus on cutting cost from tax on the, in my opinion, minute amount of dividends, I think SPY and VOO provide better spread, liquidity being more commonly traded. It also has higher asset under management. These are important as it reflects a better representation of the true market.
Depending on what you look for, I prefer volatility to have opportunities to buy cheaper.
You could consider taking up a Regular Savings Plan with FSMone. There is the option of investing in ISHARES CORE S&P 500 ETF .
The minimum monthly investment amount is $50, or you could just invest a lump sum amount. Fees are relatively low too.
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22 Apr 2020
Hello! I am currently invested in VTI due to the diversification and the entire VOO is also taken into consideration under VTI ( Total Stock Market). The 30% withholding tax is really not important if you are going for capital gains because the dividene yield of VOO is rather low anyway. If you are looking for low comission fees, you can try FSMone or Saxo Markets. For me I am buying VTI through Kristal.ai, with absolutely no fee. Do check it out if you want to!
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