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.