In Part 1 of this series, I explained and showed that Irish Domiciled ETFs are more tax-efficient for Singapore investors.

However, dividend withholding tax is not the only cost in investing.

In part 2, I will explore the other costs associated with investing and compare between US-domiciled ETFs and Irish domiciled ETFs to find out which is the most cost-efficient option.

Costs Involved In ETF Investing

There are two types of costs:

  • Recurring costs
    • TER of ETF
    • Withholding Taxes
    • Custodial Fee
  • One-time cost
    • Trade commission
    • Bid-ask spread
    • Estate taxes

For a long term investor, recurring costs will matter a lot more because of the more extended period the investor holds the portfolio. Those fees are charged monthly or annually and can add up over long periods.

For the short-term investor, trader or speculator, one-time costs matter much more because they generally tend to perform more trades and move in and out of the market frequently. The commission fees, bid-ask spreads matter much more in this case.