I don't do ETF. The idea behind ETF is you need to sell to get your money back. I prefer not to sell. Hence I choose to be buy-hold-dividend growth investing.

For me if I go with ETF investing,
1 S&P500 index/dividend aristocrat index
2 Asia Pacific index
3 Global bond index/amanah saham

Thanks

What is ur holding percentage right now?

The idea behind this is:
Vanguard Total Stock Market Index Fund (VTSAX) - USA equity (home equity)
America's equity represents roughly 50% of the weighted world market*.

Vanguard Total International Stock Index Fund (VTIAX) - Excluding USA equity (outside home equity)
The other half of the equity pie: ex-USA market

Vanguard Total Bond Market Fund (VBTLX) - Bonds/Fixed income (Government security and/or corporate investment grade)
Treasury (US Gov bonds) or corporate bonds

*Based on rough 9:1 ratio of developed:emerging market weightage, with US weighing at 60% of developed market

Based on the basic building block:
1. Equity - Local
For Malaysians, our home equity represents less than 0.01% of the weighted world market*. Holding 0% is a valid possibility.

Choices - note: our local ETFs blow, so alternatively:
i. Stocks
If you have roughly 800k-900k to blow, you can buy all 30 shares from KLSE 30 and mimic their actual index weight
or
You can even buy equally top 4 or 5 of KLSE 30 since they represent 35%-40% weightage of the index

ii. Unit trust (including fixed price Amanah Saham)

I have some of both, and treat Amanah Saham as a separate no withdrawal till retired bucket.

2. Equity - International
The big ocean outside Malaysia. Holding 100% equity weight in world index is a possibility.

Choices:
i. Unit trust
ii. Foreign ETF

I personally went with developed world index, I have enough (or too much I feel) emerging market exposure via my local stocks + PRS (asia pac ex japan).

Personal punt - I also went with a little Singapore index, since I see Malaysia and Singapore as neighbouring residents of the same 'taman' but will always thrive/be the more successful of the two.

3. Fixed income
Now this one where we have advantage, because pension is not mandatory in the US. Malaysians may treat EPF as this pie - conventional accounts have guaranteed 2.5% annual returns and the value does not shrink during downturn.

Based on the above, one can also include Amanah Saham fixed price funds in the same category.

Choices:
i. EPF (self contribution up to 60k per calendar year)
ii. FDs (do try to shoot for promo rates only)
iii. Unit trust (including fixed price Amanah Saham)
iv. Directly held Malaysian Government Security (MGS)
v. Foreign ETF

I hold Islamic bond fund unit trust with a mix of MGS and investment grade corporate bonds. I'll likely glide a chunk of my international equity towards international corporate bonds later nearer to my retirement. I treat EPF as a separate no withdrawal till retired bucket.

tldr: Malaysians can probably just hold 1 world index fund via a foreign ETF like IWDA or VWRD and call it the day

https://pictr.com/images/2019/08/15/5rLhgj.png

Hi all, newbie here.
May I know how to open account and start to invest?

Read first page and last 10 page of this thread. This is fully DIY. If don't like DIY and like some one doing all the buying for you,
can use
Stashaway

This post has been edited by Ramjade: Aug 16 2019, 12:55 AM

Hi all.

I have a question regarding the first post, on the withholding tax "refund":



Is it still true, as of now, that 50% of the withholding tax can be claimed back from the US IRS by filling out the 1040NR form? Has anyone succeeded in doing so?

@rjb123 (Experimenting with forum feature. Others can help answer as well. )

As a reference, another link (https://money.stackexchange.com/questions/21779/buy-us-etf-as-foreigner-a-bad-idea) also claims that partial refund of the withholding tax is possible, although the source didn't mention that it's 50% of that amount.

Thanks for the kind help.

rjb123. I think this time it should be correct.

You need to file income tax. By filing income tax with US means you have a US tax no. Made your life more difficult in the long run with a US tax no (FATCA). Some things are best not claimed.

Hi Ramjade. So, by filling income tax I can have partial "refund" from the 30% dividend paid? How much of refund can it be? Is it 50% of the withholding tax as claimed in the first post?

Why would my life be more difficult?

I have heard about FATCA but not quite sure about its impact to us NRAs. Can you elaborate more on this?

I believe as there's no agreement between Malaysia / US as a Malaysian tax resident we're not actually able to get any o the WT back (not in any automated way, anyway)

The best approach really if you're after dividends is to use Ireland domiciled ETFs - eg. buy and hold VUSD vs SPY.

Never try. Not going to try. If you try maybe can share here.
Having a tax no with US govt means it's very difficult for you to open account anywhere in the world as most places once they know you have some connection to US govt straight will reject any of your application to open account. Hard to close account also. Good eg is London major spend so much just to renounce US citizenship. His only mistake was being born in the US. Costly and troublesome for business so they choose not do business with you.

Perks of being a US citizen (FATCA) where you can't escape the long arms of the IRS. I rather pay the 30% tax then involve with IRS of the US govt and make my life difficult in the futurre.

Correct...no tax treaty

AFAIK... nonresident alien is taxed flat rate 30%... so no point in irs filing

I have no idea where this 50% refund comes from. I've not seen it in the irs website

Edit update...ok so 1040NR instructions have 2 examples of incorrect rates on dividend withheld and filing for refund... effectively 15% so maybe this is where it came

This post has been edited by dwRK: Aug 17 2019, 04:54 PM

Anyway if you're actively trading US ETFs or stocks.. Then US market is the way to go, lower fees and better liquidity. Same applies to Options, futures etc.

Recently needed to take some futures contracts out on currencies and the offering EUREX vs GLOBEX is like night and day - US all the way!

Buy and hold just pay a little extra in fees and slightly wider spreads and buy Ireland domiciled ETFs.

Bros, you need the help of a tax agent, at least for the first year. After that, I believe you can do it yourself,... but well,... just a theory only...

Let me try !!!!!!

This refund only applies if you’re tax resident of a country that has a tax treaty in place. It’s basically what’s happening behind the scenes between Ireland / US on ETFs domiciled there.

I need to update the initial post really - a bit misleading

If you are a Non-Resident, your file will begin with the letters - 'NRA' followed by a line of digits. Having an NRA file is okay, for this clearly states that you are not a resident, nor a PR nor a citizen of The United States of America.

Having a 'NRA' type of tax file is equivalent to filling-in the W8-BEN form. In North America - Non-Resident Tax Files are of NRF or NRA types,...

There is NO problem here, and when you fill-in your FATCA and your CRS forms in future, there is no difference compared to what you are doing now.

If not too sure, don't simply comment-lar, bro... I know you are trying to be a know-all,... that's up to you,..

Anyway,... I chose to counter-comment here because WHTs are starting to bite me here and there,...

Yup... this from irs website...

"FDAP income is passive income such as interest, dividends, rents or royalties. This income is taxed at a flat 30% rate, unless a tax treaty specifies a lower rate."