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Nov 26 2010

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How British Expatriates Can Invest Using Index Funds in Singapore





“The investment business is a giant scam.  Most people think they can find fund managers who can outperform, but most people are wrong.  You should simply hold index funds.  No doubt about it.” Harvard University’s Endowment Fund leader, Jack Meyer

British expatriates in Singapore are finding a way to bi-pass expensive financial services. They’re figuring out how to invest cheaply and simply with low cost index funds:

Every financial study done comparing the long term results of actively managed mutual funds (which most people are sold) to low cost index funds (which financial service companies dislike) reveals that over a lengthy period of time, the odds of success are far better with low cost indexes.

Most financial service companies break the golden rule of investing—failing to keep fees low.

They sell actively managed investment products that are better for the firm they represent, but less effective for investors. Buying actively managed funds with high expense ratios and sales charges, like those offered at FundSupermart.com , Friends Provident or Zurich International ensures a far lower likelihood of success.  It might make your salesperson/advisor happy, but you could be crying in your oatmeal, years from now.

Sadly, despite overwhelming evidence, most financial advisors recommend actively managed mutual funds and unit trusts—because it helps them make their own Mercedes payments.
…read my post

After sales fees and advisory costs, their long term odds of beating a diversified indexed account are slimmer than a goldfish’s odds in a tank of Piranhas.

So how can a British expatriate buy indexes in Singapore?

First, a warning:  There are companies here selling index funds, but they charge unreasonable fees ensuring the mathematical likelihood of only making half of what you deserve. The industry loves high fees.  Investors should embrace low fees. … read my post




Here are the steps you can take to beat the professionals at their own expensive game

  • Open a discount brokerage account at DBS Vickers, and tell them that you’d like the option to trade stocks from the Singapore, New York and Canadian stock markets.  Don’t worry.  You won’t have to become a stock trader.  This is just the supermarket you’ll be buying your indexes from.
  • When you make indexed purchases from this account (the products you’ll buy are actually called ETFs) you’ll need to do one of two things:
  1. Transfer money to the account first
  2. OR set the account up so that any purchase request sends money directly from your regular DBS account, straight to DBS Vickers, to cover the purchase.

These are the ticker symbols you’ll need if you want a diversified account of indexes, much like the global couch potato portfolio:

  • EWU = British Stock Market Index
  • VT = Total World stock market index (including U.S, European, Emerging markets indexes)
  • ISHG = International Government Treasury Bond index (including an array of first world country government bonds)

But how much in each?

Long term, it’s better to be consistent, rather than trying to dance around, following market based news, and trying to figure out which index is going to do better over the short term.  Studies show this to generally be a loser’s game.  Establish your allocation, and stick to it.

Here’s a sample for a 40 year old investor:

30-40% of their money in the International Bond index (ISHG) with 50% of the portfolio in the British stock index (EWU) and the remaining portion in the world stock market index (VT).  If a British citizen is eventually going to go back home, at some point, they may prefer to have the bulk of their money in British pounds, which is why they may want to consider having a full 50% of their stock market money in the British stock market index.

Making the purchases

You’ll need to figure out what price each of these indexes (ETFs) is trading at so you’ll know how much to buy when you place your order.

Going with ETFs, you’ll want to make sure that you’re investing at least $3000 at a time.  After all, it costs roughly $25 to make a single purchase, so it might as well be worthwhile.

If you were going to buy the British stock index (EWU) you’d want to look up the price here.

So if the price of the British stock index is $17, and if you’re investing $3000, then you divide $3000 by $17 to see that you can buy 176 shares of the index.  Just to be safe, when placing your order, make it out for 170 shares, in case the price goes up the next day.  You need to have enough money for your purchase, and the price you pay could be higher or lower than what you see.  It will be based on the market price at the time your order goes through.

Your order entry will look like this:

  1. The market you’d be choosing is “U.S.”, as you can see by the first line. It’s a British stock index, but you’ll be buying it from a U.S. supermarket.
  2. You’d place an order to “buy” as you can see by the second line
  3. The quantity is the number of shares you’re ordering
  4. The symbol for the British Stock Index is EWU
  5. And the order type is a “Market Order”
  6. You’d then plug in your trading password and press submit.

Commissions for purchases and sales are roughly $25.  If you make a single purchase of $100,000, you could pay close to $100 for the purchase commission, but generally, purchases below $40,000 (approximately) tend to be about $25 per buy or sell.

If you’re investing every quarter or every month, make sure that it’s at least $3000 at a time, so you don’t pay DBS too much in commissions, relative to your purchases.

And while you’re making your purchases each month, allow your purchases to rebalance your portfolio back to the originally desired allocation.  For example, if your world index has underperformed the others, for that month, then buy the world index.  If your British index has underperformed for that month, then buy that one.  By bolstering up the laggards, you’ll ensure that you invest, using Warren Buffett’s motto:

Be greedy when others are fearful.





About the author

andrew hallam

I'm a freelance finance writer, lucky enough to have been nominated as a finalist for two Canadian National Publishing Awards. I'm also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, a book explaining how I became a millionaire on a teacher's salary, while still in my 30s. Working to empower people financially, I'm available to motivate and inspire people on basic retirement planning and index investing. I'm happy to comment on your questions, first, please read the Terms of Use.

Permanent link to this article: http://andrewhallam.com/2010/11/how-british-expatriates-can-invest-using-index-funds-in-singapore/

192 comments

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  1. avatar
    Ben

    Hi Andrew,

    Thanks for all the great advice. I came across your web-site when looking for guidance on how to go about investing while based in Singapore. I had already settled on the index / ETF approach but was (and to a certain extent, still am) confused as the best way to go about it. Hoping you could clarify a couple of points for me:

    In most of your articles you suggest buying ETF’s from US stock market (or occasionally from your home country stock market) and I am just wondering why not buy some of the ETF products on offer on the Singapore stock exchange? Would this not be more tax effective since you pay 30% tax to Uncle Sam on any dividend income you receive on stocks / ETF’s from US and you would not have to pay any tax on an ETF such as the DB X- tracker MSCI world TRN ETF which is purchased on Singapore stock exchange? (That is my understanding anyway. According to the DB X-tracker prospectus: “Individuals resident in Singapore will be exempt from Singapore tax on all foreign-sourced income received in Singapore on or after 1 January 2004, other than income received through a partnership in Singapore. Accordingly, individual investors should generally be exempt from Singapore tax on dividend distributions received from the Fund.”)

    I understand there are negatives with the SGX ETF’s when compared to the products available in the US (higher fees, less of a selection being the main ones) but I am just wondering if you (or anyone else) has done the exercise of weighing up the potential tax savings versus these negatives?

    My second question is, assuming that buying ETF’s from US market is the way to go, why not use an Online broker in the US instead of a Singapore broker such as DBS Vickers. The transaction costs are much less and they will automatically re-invest dividends for free?

    Perhaps I am over analyzing things and the effect of tax on dividends would be relatively small? Or maybe I am missing something altogether?

    Best regards

    Ben

    1. avatar
      Andrew Hallam

      Hey Ben,

      I have seen ETFs on the Singapore market, but when looking into buying them, I found that their liquidity was so low that they weren't really practical.

      As for taxes, the quote you gave from the prospectus suggested no Singaporean taxes would be levied. That didn't suggest anything about U.S. withholding tax, which the IRS takes "at source". If you purchase a U.S. stock of any kind, through any avenue (whether it's through a mutual fund/unit trust or an ETF) Uncle Sam will still take 30% withholding tax if you're not a U.S. resident. In the case of a fund, you just won't see it come off the top. But it will.

      If you learn anything to contrary, I'd be keen to learn what you find out.

      Unless things have changed, pertaining to using online brokers in the U.S., non U.S. citizens can't use them. Again, if you've found anything different, I'd love to hear about it. I did recently see an advertisment at a bus stop in Singapore for lower commissions via a U.S. discount brokerage that TD Waterhouse owns (gotta love how the Canadian banks are scooping American banking assets)

      Please let me know what you find out.

      Thanks Ben,

      Andrew

  2. avatar
    Carlos

    What is the best off shore account to trade for a Canadian Expat living outside of singapore?

  3. avatar
    Andrew Hallam

    Hey Carlos,

    I guess that would depend on where you live. Where are you currently?

  4. avatar
    Carlos

    Andrew

    Thanks for taking the time to respond! I'm sure you get a lot of messages.

    I'm currently in Belize, Central America. I'm investing through a Canadian account which seems really stupid as I'm not taking advantage of being an Expat. At the same time I can't invest with the new TFSA either!

    Is DBSvickers a good option for expats outside of singapore? I've also looked at HSBC and Internaxx. All of the companies seem to charge a lot per transaction compared to the discount brokerages.

    I am trying to buy and hold although I'm relatively new at all of this. I have been following the "dividend growth investor" blog quite religously. Your idea of just investing in the index's seems interesting as well! It does seem weird that it is so hard to beat the "averages". You would think there were quite a few good stocks above average!

    Cheers,

    Carlos

    1. avatar
      Andrew Hallam

      Carlos, I’m replying after two years. My apologies for missing this. I think you should give TD international a try, based in Luxembourg. You could wire money there and build a portfolio of low cost ETFs from there. Unlike with Singapore, there’s no test to take before opening the account.

      Sorry for missing your comment!

  5. avatar
    Alastair

    Hi Andrew

    I really enjoyed your book and recent talk at the American Club.

    As a British expat in Singapore I am looking for a cost effective way to buy index funds or ETFs from here. You suggest buying the British Stock Market ETF in the US in US dollars. However, this would give me currency transaction costs and, I assume, potential currency risk. I'd therefore prefer to trade in UK sterling.

    I approached Vanguard in the UK but they only accept UK residents. Is there any way that you know of to buy UK sterling index funds from here?

    For ETFs, I've looked at DBS Vickers but their fee for UK stocks is 1%, plus they don't allow internet transactions ('phone only), which is more hassle. Looking on the web I see that Saxo Capital Markets allow non-residents to register in the UK, and they are also here in Singapore. Their rates are much better at only 0.1% for UK stocks, although I need to investigating them further.

    Do you have any other suggestions?

    Thanks

    Alastair

  6. avatar
    Frank

    Hi Andrew

    Thanks for all your sensible, well argued advice on this site. As a clueless (50-year-old!) novice in investment matters, I could ask dozens of questions, but for the moment I'll ask just one.

    In the post above, you state that "If a British citizen is eventually going to go back home, at some point, they may prefer to have the bulk of their money in British pounds, which is why they may want to consider having a full 50% of their stock market money in the British stock market index." My question is: why should the currency matter? If I invest, let's say, 60% of my savings in the total world market and the remainder in bonds, am I disadvantaged in some way if I retire to the UK ten years later?

    1. avatar
      Andrew Hallam

      Hi Frank,

      Here's a scenario. The Canadian dollar recently surged tremendously over the past five years or so..against the Euro, the pound and the U.S. dollar.

      If I were repatriating back to Canada last year, and the bulk of my money were in U.S. and International stock indexes (denominated, of course, in non Canadian dollars) then the account value, in Canadian dollars, could be worth less, even if the other markets had risen slightly.

      I just like to know that a crazy rising Canadian dollar, upon my retirement, isn't going to shrink the total value of my account too much–based on a CDN dollar perspective. I'm actually pretty conservative though Frank. I can't control everything, but I like to put some of the control in my favor, if possible.

  7. avatar
    James

    Hi Andrew

    I read this post with interest as I'm a Brit working over here in Singapore, I'm just working my bond / equity ETF allocation after reading your excellent book and posts on your website. I'm not sure if I will want to move back to UK in the near future, and am happy in Asia for now, especially as I am also have HK PR status.

    If you were in my position what would you recommend? I was thinking of EWU, VT, ISHG and a Singapore index like ES3, would you bring any HK index into this portfolio?

    I'm really excited to get a portfolio started but there some hesitancy on my part to get the perfect balance (which I'm sure doesn't actually exist), but I'm happy to recently escape being sold a Zurich product!!

    Many thanks

  8. avatar
    James

    Hi Andrew

    I read this post with interest as I'm a Brit working over here in Singapore, I'm just working my bond / equity ETF allocation after reading your excellent book and posts on your website. I'm not sure if I will want to move back to UK in the near future, and am happy in Asia for now, especially as I am also have HK PR status.

    If you were in my position what would you recommend? I was thinking of EWU, VT, ISHG and a Singapore index like ES3, would you bring any HK index into this portfolio?

    I'm really excited to get a portfolio started but there some hesitancy on my part to get the perfect balance (which I'm sure doesn't actually exist), but I'm happy to recently escape being sold a Zurich product!!

    Many thanks

    1. avatar
      Andrew Hallam

      Hey James!

      First of all, I'm absolutely thrilled that you escaped Zurich. Was it expensive to get out?

      As for your allocation mix, here's the long term beauty: you don't really need to sweat much about your specific allocation. If you rebalance your chosen allocation with fresh purchases (and/or annual rebalancing if need be) you will do very well.

      I wouldn't bother with the HK index or the Singapore index myself. Those are tiny markets, and you will already own the world and your home country index. That should be more than enough.

      1. avatar
        James

        Thanks for the advice Andrew.

        I was actually going to buy in to the Zurich Vista product, but I decided to do some reading up before committing to anything and came across your book and website, this stopped me dead in my tracks! Thanks for saving me from some heavy charges, I also read from your recommendation another great book The Four Pillows of Investing, I advise anyone out there thinking of investing to read this and Andrew's book.

        I now feel ready to put my money somewhere which I know in the long run will produce a nice steady return!

        Again many thanks…

  9. avatar
    Andrew Hallam

    Hey James,

    I'm so happy to hear that you were able to access my Zurich article before investing with them.

    And I'm really happy that you liked my book.

    If you have time, would you mind posting a short Amazon review? That would be awesome!

    Here's the link, if you have a few minutes: http://www.amazon.com/gp/product/0470830069/ref=a

    Thanks James!

    Andrew

    1. avatar
      James

      Sure I'll do that, I'm just hoping a few more investors read it before committing themselves to fund horror!

      Just one more question about US withholding tax (been searching on the website for advice) is that something I need to worry about on my investment? Won't it make a big dent? 30% sounds a lot….

      Thanks

      J

      1. avatar
        Andrew Hallam

        Thanks James,

        if guys like us spread the word about high fees, more people will avoid costly mistakes.

        As for U.S. witholding taxes, here's the scoop.

        Any account investing in U.S. stocks of any kind (including offshore accounts like Zurich) will be required to pay 30% witholding taxes on dividends. On the Zurich site, in fine print, it mentions that cost as "minimal" and in the big picture, I think it is.

        But with DBS Vickers (or another Singapore brokerage) you will see the fee on each statement where you received dividends. It's fully transparent.

        You won't have to file a form with the IRS; the money will come off at the source so there's no filing necessary.

        Assume that your world index increases by 10% in a year. Roughly 8% of that would likely come from capital appreciation and roughly 2% from dividends. The 8% would be capital gains free, and 30% of the 2% would be deducted, courtesy of the IRS. So instead of a 2% dividend, you would receive a 1.34% dividend.

        So your after tax profit would amount to 8% plus 1.34%, for a total of 9.34% after all taxes. It would be tough to find a deal that great anywhere. As non American expats investing in Singapore, James, we get a screaming deal!

        Thanks again for offering the book review, and let me know if you have other questions.

        Cheers,

        Andrew

  10. avatar
    Dennis Lewis

    Hi Andrew

    I'm really enjoying your book "Millionaire Teacher". I'm a Canadian teacher who's lived in the Gulf region for over ten years and has seen his fair share of "financial advisors" – in particular those peddling Zurich and Generali insurance scams.

    I’m currently teaching in Qatar. I’m interesting in building a Global Couch Potato portfolio, but I'm not sure what would be my best low-cost options for doing so while living in Doha.

    Is DBSvickers a good option for expats living in Qatar? If not, what are my other options?

    Thanks,

    Dennis

    1. avatar
      Andrew Hallam

      Hi Dennis,

      I don't know what you have regionally available. You could have multiple options right at your doorstep. I don't know.

      Is there a brokerage there that will give you access to stocks on the New York or Toronto stock exchange? If so, then you can buy ETFs to build your portfolio. If you have access to the UK stock market at a brokerage there, you could something very similar.

      But if you don't have access to these markets, you may want to consider taking a trip to a country that doesn't charge capital gains on equities, and open an account there. Singapore would work. You would have to physically come to Singapore, however, to open the account, and then you would have to wire your money here when you want to make new investments. There are overseas teachers who are already doing this.

      Please spread the word among your fellow teachers. The Zurich group (and others like them) really get around….unfortunately.

      1. avatar
        Dennis Lewis

        Thanks Andrew for your quick response.

        As you suggest, I'll dig around to see if I can find a reputable brokerage here which will give me access to the New York, Toronto, and UK stock indices.

        If I have any luck, I'll let you and your readers know.

        Thanks again,

        Dennis

        1. avatar
          Andrew Hallam

          Thanks Dennis,

          You would only need access to one of those market exchanges. When you find it (if you find it) give me a shout and I'll help you with the ETFs. Ticker symbols and products are different for each of those exchanges (Toronto, New York, UK).

          1. avatar
            Dennis Lewis

            Hi Andrew,

            After doing some research about the availability of a Doha or Gulf-based brokerage account which would give me access to the Canadian, US, or UK stock exchanges, I was left a little bit frustrated. I found several brokerages in Doha, Dubai and the Middle East region, but unfortunately they did not seem to offer the low-cost account option I was looking for. They seemed more interested in steering me towards pricey trading accounts. As for the brokerages in Doha, they did not seem to be as helpful and transparent as I'd hoped they'd be.

            I tried a couple of online international brokerages which have offices in Dubai, but again they tried to steer me towards a trading account.

            One possibility was an account with Internaxx Bank: they don't offer direct links to indices as such, but some of their ETFs are index linked.

            But I finally opted to apply for a low-cost Direct Investment account with RBC, my bank back in Canada. I work for a Canadian college based here in Doha, and my salary is paid directly into my RBC account. Initially, I'd been wary of exposing my savings to the possible scrutiny of the Canadian government, but since tax on capital gains depends on my tax residency, it seems to make better sense for me to stick with RBC. This means that I won't have to worry about expensive fees for transferring funds. I was told by RBC that as a non-resident I'm restricted from mutual funds, but I have full access to the US and Canadian stock exchange indices. Anyway, I'm still in the process of setting up my RBC investment account.

            I'll let you know how it goes.

            Dennis

          2. avatar
            Andrew Hallam

            Hi Dennis,

            That certainly would be a simple solution, as long as you won't be jeapordizing your non residency status. How you spoken to a Canadian accountant who specializes in non residency cases about this?

          3. avatar
            Dennis Lewis

            Hi Andrew,

            Thanks for your warning. I phoned Revenue Canada about this matter and also consulted Revenue Canada's document "Residential Ties in Canada". According to that document, an investment account would amount to a significant economic tie with Canada. So, I guess RBC is out.

            Dennis

          4. avatar
            Andrew Hallam

            I'm glad you double-checked that Dennis. I had a feeling that was the case.

  11. avatar
    ck tan

    Hi Andrew,

    I came across your website while searching for stuff on ETF and i must say its been very helpful! I am a Singaporean, used to investing on my own. But as retirement nears, I am trying to reduce volatility, and management fees. I use DBS Securities on line. I am mostly invested in stocks in Singapore and US but I also have some invested in Dollardex. They have slightly lower fees than fundsupermart, but I am looking at reducing fees to minimum.

    I first thought of Vanguard, but then they do not entertain retail investors in Singapore. so I became very interested when you wrote that we can invest through their ETFs. I was wondering how does it work when a person buys into, say, Vanguard Total Stock Market Index Fund as against its ETF. Is one disadvantaged when buying its fund versus etf, or vice-versa?

    Thanks!

  12. avatar
    Dennis Lewis

    Hi Andrew,

    I'm opening an account with TDAmeritrade. They welcome clients based in the Gulf, offer access to all the major stock exchanges, have a wide range of ETFs with no commission charges, and are generally very reasonably priced.

    This is the allocation I was originally planning to go for:

    30% US Stock Market Index (Vanguard Total Stock)

    30% International Stock Market Index (Vanguard FTSE All World)

    10% US Bond Market (Vanguard Total Bond)

    30% Canadian short-term Bond Index

    But with reports that the bond market is likely to go bust, a friend has suggested I substitute a small capitalisations index for the US bonds and opt for long-term Canadian bonds. What's your take on this?

    Thanks again for your advice.

    Cheers,

    Dennis

  13. avatar
    Ben S.

    Hi Andrew

    Love what you are doing with the book and blog. A quick question, would love your comments on my situation:

    -I am a UK national resident in Japan

    -I have a stock trading account with my UK bank, and have been buying dividend stocks through that

    -I have also opened a cheap Japanese stock trading account in my (Japanese) wife's name in which she will be investing regularly (we're thinking dividend stocks and J-REITs)

    I really like the idea of having a dividend-based passive income. We're in a position to invest around 3000 USD per month, and hope to do so for at least the next ten years or so.

    Given all that, do you think we should also build up an index/bond portfolio or is it incompatible with our approach? Japanese brokers charge very high (3-5%) opening fees when selling funds, so opening an account the next time I'm in Singapore would probably be a better option.

    Anyway, would appreciate your thoughts if you get a moment.

    All the best

    ben s.

    1. avatar
      sendaiben

      Hi Andrew

      Since posting my ill-considered question above, I have finished reading your book and the interview where you talked about moving from stocks to a complete index-based approach. Things are much clearer now :)

      I think we are going to go with a mostly index-based approach 80%+ while still giving me the chance to gamble our money/learn valuable lessons with the remainder.

      Looking forward to learning more as I go on (Reading a Random Walk Down Wall Street as we speak).

      All the best

      ben s.

  14. avatar
    Angela

    Hi Andrew,

    I just finished reading your book. I loved it because it gave me a better picture of what I should invest in.

    Did Dennis Lewis ever figure out how a way to open up a low cost brokerage account overseas as a nonresident Canadian?

    Like Dennis I am a Canadian non-resident. I have lived overseas for 10 years now. I currently work at an international school in Prague.

    The banking system is Prague is not great for regular banking so I would be hesitate to do any investment banking with them. I have already checked with Vanguard in London, they require at least 100 000 pound investment which I can't do.

    If you know of any European investment firms, let me know.

    Thanks for your help.

    Angela

  15. avatar
    Andrew Hallam

    Hi Angela,

    I'm really glad that my book was useful to you. To answer your question, if a British account is an option for you, then HSBC offeres some wonderful opportunities to build accounts with index funds there. Unfortunately, you may have to travel to the UK to open it. You don't have to have a crazy amount of money to buy the funds and the expenses are very low. Alternatively, if you can find a brokerage in Prague that will give you access to stocks on the New York Stock Exchange (my guess is that you could fund such a brokerage) then you could buy exchange traded funds through that account, much the same way that I do. If you have access to the New York stock market, through a local brokerage, you could buy the Canadian stock market ETF (EWC) as well as a world stock market ETF (VT) and top it off with an international bond market ETF (ISHG). In brackets, I have given you the respective ticker symbols you would need to identify and buy these exchange traded funds. Please let me know how you make out.

  16. avatar
    Tony

    Hi Andrew,

    I read your book earlier this year and have now implemented the approach you suggest for a British Expat living in Singapore. Thanks very much for all the advice. I wonder if you could give your views on the following:

    1) I've been looking at an internet trading company called Internaxx, based in Luxembourg and wondered if you knew anything about them. As I don't know how long I'll be in Singapore and may move before and certainly after retirement might this be an option for investing in index funds that I could stick with if I leave Singapore?

    2) I have approximately 30% of my portfolii in ISHG with the rest split between VT and EWU and was wondering if it might be worth investing some of the bonds percentage into Corporate Bonds in an effort to increase the income. Any thoughts?

    Thanks for all your advice.

  17. avatar
    Sean McHugh

    Can you recommend a Bond ETF for British Expats?

    You say above that "If a British citizen is eventually going to go back home, at some point, they may prefer to have the bulk of their money in British pounds, which is why they may want to consider having a full 50% of their stock market money in the British stock market index."

    But investing through DBS Vickers means we have to purchase in USD, so it's not in British pounds… Is it? Or is there a way to do this with DBS Vickers?

  18. avatar
    David

    Interesting to read the advice you offer. I would value your advice on a couple of points-

    As a Brit what taxes should I consider when investing using your strategy?

    I have heard that some of the investments you don't like (like Zurich and Friends Provident) offer tax planning advantages for me should i return home – is this true?

    1. avatar
      Andrew Hallam

      Tax planning strategies aren't worth giving up 50% of your assets over David. As an expat Brit, you won't pay capital gains taxes in the UK, so depending on where you reside, you could have a sweet deal. And when you repatriate, you won't owe a penny to the UK government. You will, however, need to transfer your money to the UK when you repatriate, and from that day forward, you will have to pay taxes on gains from that date of your repatriation. You will not, however, have to pay "back taxes"

      The best advice I can give you is to wipe Zurich and Friends Provident from your memory bank. They will generally fleece you.

      1. avatar
        David

        Thanks for this Andrew. I live in Singapore, having moved here from the UK recently, and will stay here for a total of 4 years before returning to the UK. How does this affect your advice?

  19. avatar
    Dennis Lewis

    Hi Andrew and Ben,

    I just read your message Ben. Your questions are very good ones, and these were precisely the questions I had to weigh when I was considering which brokerage account to apply for.

    I'm a British-Canadian dual citizen working in Qatar. I could not find any satisfactory low cost brokerages in Qatar. After careful consideration, I eventually decided to open an account with the discount brokerage TD Ameritrade in the US (they're actually part of Canada'sToronto Dominion Bank family).

    As you correctly state Andrew, TD Ameritrade charges me a stiff 30% withholding tax on dividends. This is in spite of the fact that I'm a Canadian passport holder (and Canada has a tax treaty with the US which entitles Canadians to a 15% withholding rate). However, since I'm resident in Qatar, I just have to lump it. I do not like this.

    But on the other hand, TD Ameritrade offers me a wide range of low-cost, commission-free etfs, they have a Sweep policy in place (by which dividend earnings and interest are automatically swept into a money market account which they have set up for me), they do not charge any custodial fees for holding my earnings, they have a number of excellent, easy-to-understand trading platforms, they charge a low fee for trades ($10), they have a transparent, easy-to-understand fee structure, they have excellent and free educational and research resources (frequent webinairs, etc.), they have a very user-friendly website, accounts are protected by the FDIC, and they also offer very good and timely help (via email and phone) when asked.

    And so, on balance, I'm pretty happy with my TD Ameritrade brokerage account.

    Dennis

  20. avatar
    Dennis Lewis

    Hi Angela,

    Please see my answer to Andrew Hallam and Ben above (Oct. 15, 2012).

    Dennis

  21. avatar
    Andrew Hallam

    Hi Tony,

    Have a look at the taxes in Luxembourg before making the decision to invest from there. I don't know what the capital gains taxes are, but a friend of mine lives there and keeps his Singapore based DBS Vickers account open. Another friend lives in Amsterdam (a Canadian) and took a special trip here to open an account with DBS Vickers. Perhaps, if you have an account in Singapore, you can keep it open.

  22. avatar
    Andrew Hallam

    Hi Sean,

    I know that ISHG trades on the New York exchange and you could buy it through DBS Vickers. However, it's an international government bond index. I could be mistaken, but I do think that Standard Chartered offers access to the British stock market. If that's the case, the bond fund you would want is called the FTSE All Stocks Gilt Fund. Yeah, it has the name "stock" in it but it's a British bond fund. You can access all ETFs available on the British market through this link: http://etf.stock-encyclopedia.com/category/etfs-l

  23. avatar
    Andrew Hallam

    If possible, Dennis, always keep your bond maturities short, not long.

    1. avatar
      Dennis Lewis

      Thanks Andrew.

      I eventually went for CIU (ishares Barclays intermed bonds).

      Dennis

      1. avatar
        Andrew Hallam

        That would do nicely.

        Cheers Dennis,

        Andrew

  24. avatar
    Tom

    Hi Andrew,

    Thanks for all the great info. I am a US citizen, used to be an exec in a US firm and have lived in Thailand for the last ten years. I am 57 years old, on a retirement visa and plan to stay in Thailand. I have well over a million USD in a taxable long terms savings account and having just read your book, am wondering if now is the best time to invest in Vanguard or IShares ETFs as a retirement investment strategy? My main concerns are the price of bond ETFs and the impact of elections and the Fiscal Cliff on the market in the coming months.

    I read everywhere that bond ETFs have performed really well in the last year but are now relatively expensive. The low interest rates can only go up and if people panic sell the funds the funds yields could decrease dramatically. I don't really understand how these bond funds with 5% coupons returned 10% + in a year but it doesn't seem likely they will do it again next year. What bond ETFs would you recommend at this point and what percentage of my portfolio?

    Also, everyone seems geared for a substantial stock market correction in the end of 2012 or early 2013. I am wondering if its best to just sit in 3.25% 5 month fixed deposits in Thai banks for a while or even stay in cash until the market correction allows me buy in?

    Having said all that, I do like the idea of a long term strategy that leaves me worry free about my retirement income. I like the idea of dealing with my investment portfolio on a monthly basis at the most, what equity ETFs would you recommend now?

    Thanks in advance for your thoughts.

    Tom

  25. avatar
    AJ

    Hi Andrew

    Having read your book a few times over I am now ready to start my couch potato fund rolling.

    I am an Brit expat here in Singapore, I have a kick start lump sum and will then be making purchases 2 or 3 times a year.

    Would you still recommend the 3 EFTs from the start of this blog from November 2010 (EWU , VT & ISHG) or should I look at others and should I use DBS Vickers ?

    Thanks

    AJ

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