This is what I understand:

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You do not need to file any WHT when buying non US-domiciled ETF because no dividends are paid to you.
Instead, the dividends are paid to the management, who then pays the WHT applicable in their country.
They then reinvest the dividend net of WHT back into the index.
Hence, your gains is solely the increase in price per unit based on the NAV.

Meaning if the NAV is $100 and a $1 dividend is declared by companies in S&P 500, the management will pay the tax (assume 15%).
Hence, the NAV increases by $100 + $1 (1-0.15)= $100.85.

This is why no dividend yield is displayed.

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On the other hand, if you buy a US-domiciled ETF, dividends are paid to you.
You have to settle the tax according to the rate applicable to you.
A US-resident will pay dividend tax not WHT. A non-resident alien will pay WHT depending on the WHT applicable to him/her.

Meaning if the NAV is $100 and a $1 dividend is declared by companies in S&P 500.
NAV is still $100 because dividends are paid out to unit holders.
A US-resident pays according to their tax rate.
A Malaysian will pay 30% WHT.
Price of the ETF is still $100.

This is why dividend yield is displayed. In this case, the yield is 1%.

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what if you buy US-domiciled ETF but auto reinvest (DRIP)??

Ya, still checking on the tax on capital gain in France.
I see, thank for the sharing. Feel like synthetic fund a bit not so secure, hmm better go for the physical ETF.

Dividends are paid to you. You settle the tax and then opt to buy more units using the dividends.
So, a US citizen's and non-resident alien's actual gain is different due to the difference in tax but their capital gains are the same.

maybe you can enlighten me on this?
guess this is the purpose of forum right? to share the knowledge.

I don't get it, if it is accumulating ETF, since there is no dividend declare, how can we kena WHT?
I thought the accumulating ETF should work the same way like Warren B?

Even if there is WHT, should on the ETF level right (since the ETF is the one receiving the dividend from the US companies).

WHT summary

if you are malaysian:
kena 15% if buy ireland-domiciled sp500
or kena 30% if you buy US-domiciled sp500

either way, sure kena one...

This post has been edited by alexkos: Nov 6 2019, 06:39 PM

Found this....

http://taxsummaries.pwc.com/ID/Withholding-tax-(WHT)-rates

The current US tax structure makes in impossible for accumulating ETF. DRiP is only available for individual stocks

For accumulative fund (assuming transparency of cost to file paperwork and reinvest):
On ex date: $100-$1 = $99 and on payment date $99.85

For distributing fund (assuming transparency of cost to file paperwork and distribution)
US domiciled on ex date: $100-$1 = $99 and on payment due date investors get $0.70
Irish domiciled on ex date: $100-$1 = $99 and on payment due date investors get $0.85

Not as quite straight forward for things that pay interest - cert of deposits (FD), directly held US treasury are exempt. Certain or all municipal bonds are exempt too. But not US treasury ETFs though

This post has been edited by roarus: Nov 6 2019, 07:31 PM

Yes. Qualifying dividends and interests are not included. Also tax treaties details are in separate sections. Just putting it up if people wanna know the wht rates, and wanna see if can find funds in those countries.

sigh.... now I'm also very confused liao ..... nevermind lah....

by the way, if buy SXR8, then the intraday movement is not much since half of the time, it doesn't overlap with the NYSE?

For example iShares ETF S&P 500 would hold Apple shares. Apple would pay out dividend to iShares. Those dividends are taxable even though it is not distributed to ETF holder.

Berky is different in a way that it is a holding company and not fund manager. It has controlling rights to stocks it invests in and employs tricks like share swaps, parking assets under various sub entities like the insurance companies it owns to be tax 'efficient'. BlackRock iShares won't be able to do employ such creative tricks since the stock shares are ringfenced by trustees

It probably tracks futures when it doesn't overlap

Today is slow because futures is also not moving much

Usually the fireworks starts when US opens

This post has been edited by dwRK: Nov 6 2019, 09:01 PM

What's so confusing?
If you buy US stocks/US domiciled ETF, get ready to pay 30% tax on dividend.
If you buy ireland domiciled ETF 15% tax.
If you buy UK/HK stocks is tax free.
if you buy china company listed on HK, you pay 10% tax.

Keep it simple.

This post has been edited by Ramjade: Nov 6 2019, 11:46 PM

Hehe.... Financial industry has a way to make it complicated so that we can charge consultation fee...

Maybe I should start collect liao

Google YouTube 12 steps recovery plan for active investor.

No watch u rugi

Yggdrasil

thinking in simplistic terms...

sxr8...0.07% expense, 15% WHT
voo... 0.03% expense, 30% WHT

by inspection voo is better right? although pay 2x WHT but save more than 2x expense. if minimal to no dividend...then voo is outright winner

so maybe only high dividend yield could swing it to sxr8...you know how to work this hypothetical threshold? my calculus fails me today

maybe useful to assess other high dividend paying etfs...

This?
https://www.youtube.com/channel/UC4jSqRzCjbsU8QKNlnSklzQ

I did not test SXR8 against VOO but I tested CSPX.L (London) and VOO performed better by 0.15% p.a.
This is presumably if the method I test it is correct.

NASDAQ 100 pays lesser dividends than S&P 500.
When I compared NASDAQ 100 (QQQ v CNDX.L), the difference is 0.13% p.a.

It's hard to compare the 2 studies together because the expense ratios are not the same.
QQQ has 0.13% higher expense than London equivalent.
VOO has only 0.04% higher expense than London equivalent.

No, expense ratio doesn't have as big of an impact as WHT. It's 0.04% difference vs whole 15% difference here.

Let's say S&P500 yields ~2% anually

Hypothetical Irish and US ETFs:
i. LEPRECHAUN @ 0.07%, 15% WHT
ii. YEEHAW @ 0.03%, 30% WHT

In a hypothetical situation where S&P500 index stay frozen in time for 1 year:
1 Jan: 1,000
31 Dec: 1,000

...and both ETFs are priced at $100

Without expense and dividend:
LEPRECHAUN
1 Jan: $100
31 Dec: $100

YEEHAW
1 Jan: $100
31 Dec: $100

Let's add 2% dividends minus WHT:
LEPRECHAUN
1 Jan: $100
31 Dec: 100 + (0.85*0.02*100) = $101.70

YEEHAW
1 Jan: $100
31 Dec: 100 + (0.70*0.02*100) = $101.40

Now add expense ratio
LEPRECHAUN
1 Jan: $100
31 Dec: 101.70*0.9993 = 101.62881 => $101.63

YEEHAW
1 Jan: $100
31 Dec: 101.40*0.9997 = 101.36958 => $101.37

This post has been edited by roarus: Nov 7 2019, 01:38 PM