Avoid banks at all cost.
If scared to use banks, can consider using stashaway or endowus.

You can use stashaway Malaysia or endowus singapore.
Show them this page from IB. Let them read all the tabs on that page.
IB have office in sinagpore.
If scared to use IB, can consider using TD SG.
https://www.interactivebrokers.com/en/index.php?f=2334

u can use HSBC bank transfer as it charge lower fee and its safe compare to other moneymatch etc
dont go for stashaway as it will eat up more comisen which mean ur earning will be less

Have you used them? In what way are they not safe? I want to know as I am a user and they already save me close a thousand vs using banks since I have been using them

Thanks for the suggestions!

I heard about Stashaway but I think it is good for small amount. But for big amount, I would rather use a reputable broker or bank. I dislike Stashaway 1% commission and its a robo-advisor so its a relatively new thing to put a big amount into it.

I will think about TD though, looks like a solid choice.

Also, i believe TD charge 30% dividend right? How would it affect the return? Or is there a plan to reinvest the dividend so i don't get taxed.

Stashaway custodian is Saxo bank.
Endowus custodian is UOB Kay Hian.

So up to you to believe if they are safe or not.

IB and TD are more or less the same. For me, I lean more towards IB cause IB is better than TD in every way except for the looks.

You cannot run away from 30% dividend tax unless you are no longer malaysian citizen. Whichever broker you choose you still get hit with the 30% dividend tax.
That's why majority of people don't invest in US for dividends. Can be done but not many people doing it. People go for capital appreciation cause no tax.
Even if reinvest, you will get slapped with 30% tax before you get to auto reinvest.

Three ways around it
1. Throw away your IC and become a citizen of another country with tax treaty with US and get taxed only 15%.
2. Buy ireland domiciled ETF/unit trust (you can DIY by buying off London Stock exchange, TD does not support LSE but IB does) or use Endowus to do it for you.
3. Don't bother about dividends in US and focus on capital appreciation.

This post has been edited by Ramjade: Sep 2 2020, 09:27 PM

Hi. Can anyone please advise on which stock exchange I should buy ETF? I am planning to invest in Vanguard FTSE All-World. It's listed on LSE and XETRA.

VWRA on LSE (USD), average daily volume 18,770, bid-ask spread 19.7 bps
VWCE on XETRA (Euro), average daily volume 21,200 bid-ask spread 10.4 bps

Both have almost similar average daily volumes, but the bid-ask spread of VWCE is much narrower compared to VWRA. My broker is TS Global. What are your thoughts? Is VWCE a better choice?

Depend on
1. Do you want to hold USD or EUR?
2. How big is your buying size? Usually small buying size no problem. Just set a price you like and put a GTC to it.

don't worry about the spread... just set the price you want

the spread is willing buyer/seller... different from forex broker which use a spreader bot to add additional spread for commission

I prefer VWRP (GBP) as you don't have to convert currency twice. With VWCE you don't have to convert twice too but I think there are multiple listings in Europe. The volumes are low because they are fairly new especially if compared to the original (VWRL). You don't have to worry much about the spreads.

This post has been edited by Gwynbleidd: Sep 3 2020, 07:02 PM

Thank you for your replies.

Does the currency even matter? Any advantages to hold USD over EUR or GBP? As a Malaysian investor, none of these are my secondary currencies, and I have no preference. The Vanguard FTSE All-World ETF holds a basket of securities (over 3000) across 50 markets in various currencies.

To quote from a bogleheads webpage:

I guess the currency doesn't really matter...? I plan to invest RM30k lump sum.

Can you please clarify what you mean convert currency twice? I thought I can use instarem to convert MYR to USD/ EUR/ GBP directly into IBKR accounts?
I agree the average volumes for the distributing classes are much higher. Both VWRD (USD) and VWRL (GBP) listed on LSE have average daily volumes of 49k each.

PS: My other concern is that Vanguard will delist their ETFs from stock exchanges. Vanguard is apparently pulling out of Hong Kong and Japan markets. If there are very low trading volumes, companies will delist their products from stock exchanges. This recently happened to DWS ETFs (Deutsche bank) from Singapore Stock Exchange, where daily trading volumes for their ETFs were very very low.

This post has been edited by pigscanfly: Sep 3 2020, 11:17 PM

Yes it matter cause not all currency are the same.
Look at USD. It have weaken significantly while GBP have been increasing.

IB doesn't support deposit of USD from 3rd party even with proof. So if are paying USD, you need to deposit in say EUR.

Don't worry. Vanguard won't pull out from London. Other place maybe. But not London. Cause London etf have 15% tax advantage Vs HK, Japan, SG where they are at max 30%

Currency only matters if you plan to lump sum without DCA and matters when you exit.
If a US stock is priced in EUR, it will give you the same return in MYR terms as compared to USD.

Example: You have RM1,000 to invest today.

QQQ	$200
USD/EUR	$1:EUR0.9
USD/MYR	$1:RM4.20

Since we know the USD/EUR exchange rate, the European equivalent of QQQ (which is EQQQ) will be EUR180 ($200 x 0.9).

Now, let's compare investing in US ($200) vs EUR equivalent (EUR180).

The amount of units you get:

Instrument	Calculation	Units
QQQ	RM1000/4.2/$200	1.19 units
EQQQ	RM1000/4.2x0.9/EUR180	1.19 units

You can see that both gives you the same amount of units but they are quoted in different prices/currency.
Now let's say after 1 year, QQQ rises 10%. EUR appreciated against USD. Now it's

QQQ	$220
USD/EUR	$1:EUR0.85
USD/MYR	$1:RM4.2 (same)

EQQQ will be EUR187 ($220 x 0.85).
You bought same amount of units so your portfolio value will be:

Instrument	Calculation	Units
QQQ	1.19 x $220	$261.9
EQQQ	1.19 x EUR187	EUR222.53

Now, let's convert back to MYR to see how much we actually made.
Note that USD/MYR did not change.

QQQ	$261.9 x 4.2	RM1099.98
EQQQ	EUR222.53/0.85 x 4.2	RM1099.56

Notice that investing in either EQQQ or QQQ gives us the same return in MYR terms as long as USD/MYR rate does not change.

Your returns only change if USD/MYR changes.
Meaning if you bought US ETF when MYR was weak and sold when MYR is strong, you lose a due to exchange rate (suppose ETF did not change).
However, if you bought US ETF when MYR was strong and sold when MYR was weak, you gain due to exchange rate (suppose ETF did not change).

However, this currency fluctuation tends to be around 10% only. If you lump sum RM30,000 today and in 10 years it's RM60,000 (a 100% return), you can expect to either make 110% return or 90% return after converting back to MYR.

Daily volume is not really important. Calculate how much value flows instead.

Example: If 49,000 units done daily and price is EUR81 per unit, that's RM19,500,000 worth of stocks daily. Meanwhile you only plan to invest RM30,000 which is 0.15% of the total flow.

If an ETF is delisted, you will likely be notified. You either sell before they liquidate or wait for them to liquidate the stocks and give you the remaining NAV.

IMO, it's more important that you choose the ETF that gives you the higher expected return than obsessing with liquidity/currency issues. Choosing a shit ETF will give you shit returns even if you have the best liquidity/currency rate.

But then again, no one can predict the future.
Also, beware of expense fees. Unpopular ETFs tend to have higher expense fees. IMO, anything above 0.25% p.a. is high.

As Ramjade mentioned, so far the chances of converting MYR to USD is very slim. However, if you are converting to SGD first, then any of the three currencies are fine (GBP, USD, EUR). But if you plan to send money directly through a single conversion, then it's either GBP or EUR. Imo don't be to fussy about currency but keep costs in mind.

I'm a big fan of Vanguard FTSE All-World ETF too until an ETF that tracks the Global All Cap Index is introduced (hopefully by Vanguard too).

Oh thanks for the info. Didn't know that IBKR doesn't accept USD deposits from 3rd parties. Looks like it's down to either EUR or GBP.

Thank you Yggdrasil for the very detailed explanation. Your post basically illustrates the effects of currency movements on investment value. It's like macroeconomics 101. Your illustration assumes that USD/MYR exchange rate remains constant, but in the real world scenario, exchange rates constantly fluctuate. I actually plan to DCA into this ETF every 6 months, so hopefully I will average-out the exchange rate fluctuations.

But as you have mentioned in your second post, no one can predict the future, and that we should not obsess with liquidity or currency issues. I am not here to debate/speculate on currency movements. I am here for low-cost diversified investing. I agree that choosing the right (low-cost) index is more important. A lousy index gives lousy returns, and a hyped-up index may just be another bubble waiting to burst.

Global All Cap Index? Meaning the index covers developed + emerging markets across large, medium, and small-cap sectors? It's gonna be expensive to track so many stocks across the globe. Most ETFs will "optimally replicate" the index to reduce operational fees. Even the Vanguard FTSE All-World doesn't fully replicate the index. And the weightage allocated to small-cap stocks are so small, their contributions (or lack-of) are insignificant to the overall index.

This post has been edited by pigscanfly: Sep 4 2020, 11:08 PM

Yes. Not true. VT tracks the Global All Cap Index and has a very low fee but is US domiciled. I should have mentioned non-US domiciled ETF.

This post has been edited by Gwynbleidd: Sep 4 2020, 11:20 PM

Noted that ETF investing only works if it's going up. But if US became like Japan where the index are flat for 10 years+, you going to have big trouble.

got inverse etf....profit when market goes down...

and dividend focused etf...

also don't have to hold on when underperforming...

it's a given by default you take on fx risks investing overseas... but you can hedge it if amount is significant... imho don't worry about it but knowing it can be against you

ibkr doesn't actually say 3rd party xfers in eur/gbp is ok... we just exploiting the less stringent checking

also "low-cost" probably is not best value or best performing...instead choose those that fits your desire n risk tolerances