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Post by Fletchsmile on Jun 25, 2018 12:08:45 GMT 7
So what we have so far for a possible portfolio as suggested by AyG: 35% Europe equity (possibly: BlackRock Global Funds - Euro-Markets Fund D2) 25% Global equity (possibly: Pictet - Global Megatrend Select) 20% Bonds (Invesco Funds - Invesco Euro Bond Fund A Accumulation EUR or Schroder ISF EURO Bond C Acc EUR) 10% Infrastructure (Lyxor FTSE Developed Europe Infrastructure UCITS ETF [MAKE]) 10% ??? (Cash not needed as we have cash savings set aside) Is there anything wrong / missing with this picture? Should we add some emerging market equities? Would Thai LTF fit the bill? Any other options? Looks overly dependent on developed markets - particularly developed markets equities to me. But these things and comfort levels can be something of a personal choice
I'd prefer some exposure to Asian equity markets, given the high growth potential and portfolio diversification benefits.
If you looked at the first decade of this century for example, many developed markets like US, UK and Europe equities went nowhere between 31 Dec 1999 and 31 Dec 2009. Indices for S&P, FTSE100 and Eurostoxx50 were all lower on 31 Dec 2009 than they were a decade earlier. For me having exposure to Asia, particularly Thailand during that period was very useful. US equities have had a strong run in the second decade of this century compared to many Emerging Markets, so again feels time to me for adding some EM exposure - particularly Asia.
If me, I would take out the max I could in Thailand LTFs for the tax benefit. That would also be a decent proxy for some Asia and EM equity exposure/ diversification. Albeit a bit overly focused on a single country
If you could invest say 25k a month in LTFs, that would be just over 30% of your 80k you're putting into a portfolio. That is higher than the weighting you might normally want to Asia/EM / a single country. However, the tax benefit goes a long way to justifying that. Bear in mind the cost of that 30% may be around only 20% or so of your total portfolio cost. You could also reduce your developed market bond exposure a bit and choose a 70/30 equity/bond LTF fund which would again diversify your bond exposure. Consider the LTFs as a temporary high weighting though for the first 5-7 years or so
Infrastructure isn't always the diversifier it is cracked up to be. At the end of the day, although a different sector they are often still equities so will fall/crash when equities do too. Consider also adding some property exposure in there.
So for me on new money you're investing monthly I'd prefer something like:
Thai LTFs say 30% = maxed out to gain tax benefit and diversify a portfolio. 100% Thai equity or 70% Thai equities/30% Thai bond fund
European equities 25% - 30% (bearing in mind Global equities will also have a large chunk in Europe anyway)
Global equities 25% Bonds 10% - 15% Property Funds 5%
As the holding periods for Thai LTFs mature and you can safely keep the tax benefit you can then switch the funds into different (non-Thai funds), as you probably don't want such a high level of exposure to i) a single country like Thailand ii) Asia/EM. Some of it you might prefer to put in a wider remit Asian equity fund instead
While you're contributing to LTFs and collecting the tax benefits, you may want to avoid Asian equities to avoid a double count given the already temporary high exposure you have/ As the LTFs hit the minimum holding period, switching some into wider Asian funds may be a sensible move
Longer term once you've had the LTF tax benefits a portfolio might look something like
European equities 30% - 35% Global Equities 25% - 30%
Asian equities 10% - 15% (not just Thailand but wider Asia developed and EM Asia)
Bonds 10% - 20% Property Funds 5%
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sophie
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Post by sophie on Jun 30, 2018 15:07:44 GMT 7
Thanks for all the great advice, we're in the process of opening an account with Internaxx in Luxemburg and deciding on the portfolio. Will keep everyone posted!
Due to a variety of reasons we did decide to create our emergency fund offshore as well
Maybe also in Luxembourg, not sure...
Any advice on what kind of account (and where) best to open for an emergency fund? We're thinking 35,000 EUR = 1,350,000 THB
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AyG
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Post by AyG on Jun 30, 2018 15:14:23 GMT 7
Thanks for all the great advice, we're in the process of opening an account with Internaxx in Luxemburg and deciding on the portfolio. Will keep everyone posted! Due to a variety of reasons we did decide to create our emergency fund offshore as well Maybe also in Luxembourg, not sure... Any advice on what kind of account (and where) best to open for an emergency fund? We're thinking 35,000 EUR = 1,350,000 THB Might I suggest you post your proposed portfolio here before you actually invest? It's always good to get second and third opinions, even if ultimately you choose to ignore them. As for your emergency fund, I think it should be tied to the currency in which you are likely to need your emergency fund. At the moment I'm presuming it's Thai baht, so personally I would stick with a Thai bank account. I'm personally keen on the Krung Sri (Bank of Ayudhya) Mee Tae Dai account. It gives a decent rate of interest and you can make two free withdrawals per month. Once you move to the Eurozone, then look at what immediate access bank accounts are available in your new country. In an emergency you don't want to have to deal with inter-country bureaucracy.
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Post by Fletchsmile on Jun 30, 2018 16:07:47 GMT 7
Thanks for all the great advice, we're in the process of opening an account with Internaxx in Luxemburg and deciding on the portfolio. Will keep everyone posted! Due to a variety of reasons we did decide to create our emergency fund offshore as well Maybe also in Luxembourg, not sure... Any advice on what kind of account (and where) best to open for an emergency fund? We're thinking 35,000 EUR = 1,350,000 THB Might I suggest you post your proposed portfolio here before you actually invest? It's always good to get second and third opinions, even if ultimately you choose to ignore them. As for your emergency fund, I think it should be tied to the currency in which you are likely to need your emergency fund. At the moment I'm presuming it's Thai baht, so personally I would stick with a Thai bank account. I'm personally keen on the Krung Sri (Bank of Ayudhya) Mee Tae Dai account. It gives a decent rate of interest and you can make two free withdrawals per month. Once you move to the Eurozone, then look at what immediate access bank accounts are available in your new country. In an emergency you don't want to have to deal with inter-country bureaucracy. Wise words from AyG - as if often the case
If you post your suggested portfolio (even if only in % terms) people will comment on it for you, and you would likely get a few different perspectives in those 2nd/3rd opinions.
For the emergency fund if you're living and working in Thailand I'd keep it in THB here for now. Before you move countries and finally move on from Thailand clear it out and move it on to where you're heading or your home in Europe. Transferring money out of Thailand is easiest while you are actually here. To transfer overseas you often need a presence here at some point in the transaction
TMB's "No Fixed" Account (a high - relatively word these days - interest variable rate deposit account with no restrictions on depsoits/withdrawals) has also been consistently decent over the years. We operate it alongside their "All Free Account". The All Free account has very low fees for most things so great for transactional use - but pays very low interest. The NoFixed pays a relatively high rate of interest and is designed for savings rather than transactional use, so they complement each other nicely. Very easy to transfer between the two TMB accounts for free online or via mobile.
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Post by Fletchsmile on Jun 30, 2018 16:25:09 GMT 7
Thanks for all the great advice, we're in the process of opening an account with Internaxx in Luxemburg and deciding on the portfolio. Will keep everyone posted! Due to a variety of reasons we did decide to create our emergency fund offshore as well Maybe also in Luxembourg, not sure... Another thing you might want to think about is whether Internaxx offer a facility which would allow you to borrow against the investments you hold should you want to. This can be useful for things like:
1) Buying a property. As an expat often on the move, you may find it difficult to borrow money when you need to, eg a traditional mortgage may be hard to get. eg In Thailand you're a foreigner, eg in other countries because you've moved around and don't have a decent credit history, and that may also apply initially to your home country when you first return after years of absence
2) Additional emergency fund if needed
3) General borrowing at a low rate. As it's secured against your investment portfolio, it should be able to get low interest terms. Often better than a mortgage/ home loan, and definitely better than an unsecured personal loan or credit card borrowing. School fees fore example can be very expensive if paying yourself as an expat.
I know if cashflow gets short, we have this as a fallback to help us thru difficult times, and may be preferable to selling investments outright.
StanChart Singapore allow us to borrow up to 70% of our investment portfolio at SGD Libor + 85bp, which is just over 2%. We used this partly to finance a new house in Thailand, and as not fully drawn it's there for emergencies/ unforseen events/ general cashflow/liquidity
StanChart Singapore probably isn't right for you if you're not going to be long term Asia based like us. Also there are often better investment choices around. For us it links nicely to Asia, offshore, SGD, general banking. But the principal is worth thinking about with whoever you choose.
FireinTH uses Interactive brokers, and has a similar facility to borrow against his investments if need be. They have a decent reputation and I know several people happily use them. As well as shares on different stock exchanges in different countries, you can buy unit trusts, mutual funds, ETFs etc thru them.
You don't need to use the facility and may never do. But it can be useful to have available if needed.
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sophie
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Post by sophie on Aug 18, 2018 9:18:52 GMT 7
After a long process of preparing and sending documents to Internaxx in Luxembourg to open an investment account, the bank refused to open the account for me. When pressed for clarification, the bank replies that it is due to a 'combination of factors'. Was the investment amount to modest? Hard to figure out. Anyone have any other good options for offshore investment account suitable for expats (preferably in or close to europe) ?
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Post by rgs2001uk on Aug 18, 2018 11:00:29 GMT 7
If the amount was less than $100,000 then yes it probably was too small.
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Post by Soutpeel on Aug 18, 2018 13:27:55 GMT 7
After a long process of preparing and sending documents to Internaxx in Luxembourg to open an investment account, the bank refused to open the account for me. When pressed for clarification, the bank replies that it is due to a 'combination of factors'. Was the investment amount to modest? Hard to figure out. Anyone have any other good options for offshore investment account suitable for expats (preferably in or close to europe) ? Most countries now have extensive controls in place as regards letting people open "offshore" accounts, and whether they let you open on is all dependent on how much your fronting as the paper work the bank has to do as regards due dilligence is extensive mainly forced by the yanks, but closely followed by those in the ivory tower in Brussels...for example In Singapore when i opened my offshore account about 12 years ago...they wanted USD 25k deposit, copy of your passport and a declaration you were not a Septic or had septic residency... Fast forward to 2017/18 - similar account they now want USD 200k opening balance, a lot more checks and paper work and if you drop your balance below 200k they will hit you with a USD 50/ service fee and are very paranoid about the source of deposits.. i was paid one month out of a company US account out of New York, and they nearly went into heart failure, as thry thought i was working in the US and hiding money in Singapore, in fact i was working in Thailand...
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Post by Soutpeel on Aug 18, 2018 13:30:01 GMT 7
After a long process of preparing and sending documents to Internaxx in Luxembourg to open an investment account, the bank refused to open the account for me. When pressed for clarification, the bank replies that it is due to a 'combination of factors'. Was the investment amount to modest? Hard to figure out. Anyone have any other good options for offshore investment account suitable for expats (preferably in or close to europe) ? In answer to your question try Singapore or HK...they may be will to play, dependent on how much money is in play oh and it has to be the MNC banks in Singapore, the locals will not touch you... So Citi international personal banking, HSBC etc
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somtum
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Post by somtum on Sept 8, 2018 18:19:40 GMT 7
Quick question, as I’m in nearly the same situation as Sophie (also German, earning THB, some funds left in EU, similar amount to invest):
If it’s buy-and-hold, why not use one of the low-cost online brokers in Germany, such as Flatex in Germany or Degiro (Netherlands and many other European countries)? If I understand correctly, tax only hits you when you actually sell (and made a capital gain) and from dividends. This is how I currently understand it; I’m still trying figure everything out myself.
I was looking for a broker in a country where I don’t get taxed for capital gains as a foreigner because I might want to not only buy-and-hold but maybe even trade. So I am also looking into Luxembourg and Singapore (and probably gonna face the same issues like you).
Anyways, following this thread.
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chiangmai
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Post by chiangmai on Sept 10, 2018 12:06:04 GMT 7
There's no capital gains in Thailand but dividends are subject to income tax.
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AyG
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Post by AyG on Sept 10, 2018 12:12:44 GMT 7
There's no capital gains in Thailand but dividends are subject to income tax. So in Thailand always buy funds that don't pay dividends.
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