I want to regularly invest $350 every month in the S&P 500. What is the best way to do so? - Seedly
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S&P 500 Index

Anonymous

Asked on 26 Mar 2020

I want to regularly invest $350 every month in the S&P 500. What is the best way to do so?

Should I invest through the Infinity US 500 index fund or through an ETF?

I’m thinking that investing every month through an ETF using Saxo would be more costly than through the Infinity US 500 index fund. Can I get some help? Thank you

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Answered on 26 Mar 2020

-TD Ameritrade U.S. branch (no! trading fees, no account maintenance fees, no quarterly paper statement fees)

-converting sending SGD to USD to Ameritrade via TransferWise (do not convert by Your bank)

-all dividends, however, subject to 30% U.S. withholding tax then​​​

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JT
JT

27 Mar 2020

I see, thanks!
Frankie Rappaport
Frankie Rappaport

11 May 2020

Try to buy preferably Ireland (instead of USA) domiciled ETFs, if your selected ones distribute dividends, because USA subtracts 30% dividend tax withholding (Ireland domiciled: only 15%). For SP500 ticker VUSA would be a good choice. If you had to convert SGD into USD or EUR for buying use f.ex TransferWise instead of your bank or broker to currency convert. bye, good luck!
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Penny Chong
Penny Chong
Level 5. Genius
Answered on 11 May 2020

Try Interactive brokers for domiciled S&P500 ETF

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Xavier
Xavier
Level 3. Wonderkid
Answered on 26 Mar 2020

Hi as the amounts per month would be relatively small (don't get me wrong, I'm referring to whether it's economical or not), it would be better IMO to do the investments in batch if you must really invest in S&P 500.

Let's say every 3 months interval, you would have $1050.00 to invest which would be more economical. This is because brokerages charge a commission when you buy through them.

Another thing to note is where the ETF is listed and also whether you want an accumulating (dividends reinvested)or distributing (dividends distributed) version.

Do take note, those distributing ETFs listed in US stock exchanges are subjected to a withholding tax of 30%. Hence, ETFs domiciled in the UK is worth looking at cause they are not subjected to 30% withholding tax. Hope this helps! 🤗

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Question Poster

26 Mar 2020

Hi Xavier, thanks for the detailed reply. Yes i understand all the withholding tax stuff but what i’m really having trouble understanding is which would be more cost-efficient to RSP in; an ETF (Irish domiciled VOO) or an Index Fund (Infinity US 500)?
Xavier
Xavier

28 Mar 2020

VOO in this case. As Infinity US 500 has crazy fees. Do take a look at their fund fact sheet just to make sure about their fees :)
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