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Post by eldivino on Jul 7, 2021 1:06:17 GMT 7
I’m a EU citizen living in Thailand and want to buy some US domiciled ETFs. They are not available from any of my brokers in Europe. There’s also no EU equivalent.
Is there any broker you would recommend for this? My issue is that I would only use this account for those US domiciled funds but nothing else; I don’t want to move all my other funds there from Europe. So the account would easily be inactive quite often.
Currently looking at:
- Interactive Brokers: foreigners aren’t eligible for the Lite Account so I’d have to pay fees every month.
- Charles Schwab: Only requirement for their international accounts seems to be minimum deposit of USD 25k
- Saxo Trader: inactivity fee of 100$ if no trades in 6 months
- TD Ameritrade: They seem to have a Singapore company as well that Thai residents are supposed to use. So not sure whether I’d have to an account with that entity or their main US one
- Any recommendations?
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AyG
Crazy Mango Extraordinaire
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Post by AyG on Jul 7, 2021 6:57:05 GMT 7
1. I am extremely surprised that you can't buy US stock from your existing brokers. Are you sure about that?
2. When you say there's no EU equivalent, is this because you want to buy something extremely risky such as 3X ETFs?
3. Closer to home, have a look at SwissQuote (formerly Internaxx). I no longer have an account with them, but when I did I was very happy with their system and their service.
4. I also used to have an account with Saxo. However, they increased their charges three times in a year, so I quit. They had a custody fee at the time. Don't know if they still do.
5. I currently have an account with Interactive Brokers. Don't like their trading platform. Don't like their reporting because of the time zone difference. Don't like that I have to track every dividend since they don't arrive on time. Customer service is good, and account opening is pretty straightforward. The best thing IBKR, however, is the price. Have you considered moving some additional assets to them so you qualify for Pro, rather than Lite?
6. I wouldn't be surprised if TD Ameritrade put you with a Singapore entity. Saxo does. IBKR doesn't, so you get an account in the US (but usually connect to their Australian system for performance reasons).
7. If you're going to buy ETFs which pay a dividend, be aware of the withholding tax situation. Does the broker implement the treaty-reduced 15% rate for Thai residents? (Saxo for one doesn't.) If not, you'll have 30% withheld. Also look into the death duties situation - particularly for any cash you may hold within the account.
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Post by eldivino on Jul 7, 2021 9:19:38 GMT 7
1. I am extremely surprised that you can't buy US stock from your existing brokers. Are you sure about that? 2. When you say there's no EU equivalent, is this because you want to buy something extremely risky such as 3X ETFs? Exactly. The best equivalent I could find is a 2x ETF on the S&P500 and one 3x with extremely bad expense ratio. Not sure if I’m wrong here but I also believe for leveraged ETF having enough fund volume could be important so I would feel better with one of the big US funds. Thanks, I heard about both before. I saw they charge a custody fee of up to 50$ per quarter. Do you know if that’s for simple shares in ETFs held or only for e.g. things not traded publicly? I excluded them for now because they charge an inactivity fee of 100$ of nothing is traded in six months. I’ll probably not use this account too much but just for those leveraged funds. As a foreigner, you cannot open Lite. They force you into Pro and I believe you don’t need to move assets for that. Maybe it gives you better fees if you move assets but I don’t really wanna move all my assets there. Their Pro Account charges 10$ per month if no trades are being made so same issue for me as with Saxo. They already declined. Don’t accept Germans and don’t accept Thailand. Thanks, will have a look at it. What is death duties? Is that in case I die? I‘m currently considering Charles Schwab or Tastyworks. |
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AyG
Crazy Mango Extraordinaire
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Post by AyG on Jul 7, 2021 9:50:50 GMT 7
1. 3X ETFs are incredibly risky products. They don't do what you expect from the name. Suppose an index goes from 100 to 200 (up 100%), it does not mean that the value of the ETF will go up 300%. It might go up more, it might actually lose you money - a lot of money. These are not good products for anyone. Please make sure you understand what you're getting into if you decide to go down that route. You might be better off going to Monte Carlo and putting everything on red.
2. SwissQuote's custody fee is 0.025% quarterly (min. CHF 15, max. CHF 50), which is pretty reasonable in my opinion. It applies to ETFs.
3. Yes, for when you die.
4. I'd never heard of Tastyworks. If you look at their fees, they charge $45 to withdraw money to a foreign bank account. For me that would be an absolute non-starter.
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Post by eldivino on Jul 7, 2021 10:07:21 GMT 7
1. 3X ETFs are incredibly risky products. They don't do what you expect from the name. Suppose an index goes from 100 to 200 (up 100%), it does not mean that the value of the ETF will go up 300%. It might go up more, it might actually lose you money - a lot of money. These are not good products for anyone. Please make sure you understand what you're getting into if you decide to go down that route. You might be better off going to Monte Carlo and putting everything on red. Thanks, always good to hear other people‘s opinion especially when it’s senior members from a forum like this. After having done my research, my conclusion is as follows. Please let me know what you think about this and whether I’m completely wrong: As a small individual investor literally everyone tells us to put our money in a broad index fund such as MSCI World or S&P500. The key assumptions behind that advice is that you’re diversified and that Markets will grow in the long run even if there may be times of decline or volatility in between. So the other advice that small individual investors like us then get is to buy and hold and don’t sell during difficult times. If I consider this to be true then I don’t see why 2x or 3x ETF on the same indices would be any worse. The only thing that should be worse is the volatility and therefore the psychological and emotional stress when markets fluctuate or decline; the 2x or 3x should simply amplify what you also have in a simple 1x index fund. What they call “volatility decay” also happens with a simple MSCI World ETF; if prices go down by x% then prices would have to go up by more than x% to get back to where you were. Yet we are being advised to buy those funds (and I do hold them, it’s my primary investment). Bottom line for me, and again, would love to hear your thoughts, is that as long as we (1) assume that markets will grow in the long run and get back from lows, and (2) can stand the emotional or psychological stress of not selling during bad times, there should not be an issue with leveraged ETFs, as least not more or less as with simple index funds. |
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Post by eldivino on Jul 7, 2021 10:22:24 GMT 7
I'd never heard of Tastyworks. If you look at their fees, they charge $45 to withdraw money to a foreign bank account. For me that would be an absolute non-starter. Cant say I like such fees but for me it would be less of an issue than paying some inactivity fee or custody fee every month given that I probably wouldn’t withdraw that often. |
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AyG
Crazy Mango Extraordinaire
Posts: 5,871
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Post by AyG on Jul 9, 2021 6:37:28 GMT 7
Just received an email from IBKR
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