For those of you seeking short-term (1-3 month) ultraliquid USD parking facility in IB, I found several US 1-3 month Treasury bill ETFs like BIL and SGOV.

Assume you adjust SMART routing to VLow (High volume exchange with lowest fee), you can get your trades executed with as low as 0.24 USD instead of the usual "0.35 USD". BIL is liquid but expense ratio is high at 0.14% p.a., SGOV's expense ratio is low but that is due to temporary fee rebate by BLK which would terminate on 30th June 2023 (after which it would be around 0.14-0.15% p.a., on par with BIL). Moreover, SGOV has about 6% asset exposure in its own institutional cash fund which has Treasury floating rate notes and introduces additional counterparty risks with banks like Citi, Credit Agricole etc. So, not truely "risk-free".

I did some IRR calculations and found that you can get returns of about 1.3% p.a. for the 2-month holding period, factoring 30% WHT for the monthly distributions and 0.24-0.35 USD commissions, charged twice (once during purchase, once during sell).

Much lower than contemporary 2-month UST yield, but better than holding everything on cash balance and let IB suck all your interests away I guess. After all, in terms of opportunity costs, there is nothing more "risk-free" than risk-free rates. So, in theory, as long as better than 0% p.a., one should bite.

it is not a bug ... there is no auto fx conversion for margin account...

purpose of margin account is to access margin loans if required ... your sgd/stocks are used as collateral as well as to pay fees if you buy stuffs not in sgd... it is standard practice to convert before buying, or create a link order to execute fx conversion if you don't want to take the margin loan... this is well known and ibkr even describes it in their ibkr campus lessons...

problem is you get some noobs who doesn't know shit making fuss out of own ignorance... anyways mine is margin acc...

By the way, if your portfolio size is as big as 100k USD you should seriously consider buying US T-bills directly... it costs 5 USD per trade but given your fund size, the fees are peanuts when expressed as a percentage of the overall investment, thus you get to keep the bulk of returns...

As long as your cash is positive, no interest will be charged by IBKR.

Having fun with WCRS function on Bloomberg to compute carry trade returns using different currency pair... Look at MYR... 

after reading, my interpretation is if you have spare $XXX that you don't want to put to stocks, buy T bills in multiples of $3700? then the remainder spare, put into $BIL for further optimisation

Hehe that's opportunity cost, not really breakeven per se. But yea, that's one way to compare. Another way is to look at an IRR of 4.8x% (for BIL) vs the return of a 4-week T-bill yield of 5.4% minus the 5 USD fee (assume you pay once and hold the T-bill till maturity). I use a 4-week T-bill because the duration of BIL is around 1 month too (0.08 years = 0.96 months).

Yup that's why using IRR is a better way to compare since the 30% WHT refund is taken care of in the cash flow calculation when the IRR is computed. In the end we care about the returns we get and we compare them. Fees can fluctuate.

As far as I know, the WHT deductions appear on my IBKR activity statement:



And previous info from our friend Gwynbleidd confirms this. You can read the posts from here onwards: https://forum.lowyat.net/index.php?showtopi...ost&p=107454178

corporate bonds are generally taxable

I think this is the closest I can find: https://www.ssga.com/library-content/produc...-us-en-cash.pdf

Based on the original PATH act, only 4 of these are qualified for a refund:

1. original issue discount on an obligation payable within 183 days of issuance
2. interest on an obligation in registered form (other than interest on an obligation issued by an obligor in which the RIC is a 10 percent shareholder or interest that does not qualify as portfolio interest)
3. interest on deposits, and
4. interest-related dividends received from other RICs.

Point 1 above is relevant for primary market-issues of 4-week, 12-week,... up to 6-month T-bills. 

If you hold commercial papers (original issues with less than 183 days/6 month of maturities) I suspect it may be eligible for a refund as well.

Anything longer than 6-month generally will be a no.

Anything longer than 6-month generally will be a no.

i am not wrong...   corporate bonds or company bonds are generally taxable

you showed a list of qii funds... these funds will have a mixed of taxable corporate bonds and non-taxable bills...

as for bil not 100% qii... because it also holds cash...

You need to search Taiwan dividend tax on Malaysia. Ibkr is smart enough to withd hold the correct amount if you fill up your tax country correctly.

4. Dividends paid by a company which is a resident of Switzerland to a resident of Malaysia may be taxed in Switzerland, and according to the law of Switzerland, but the tax so charged shall not exceed: (a) 5 per cent of the gross amount of the dividends if the recipient is a company (excluding partnership) which holds directly at least 25 percent of the capital of the company paying the dividends; (b) in all other cases, 15 per cent of the gross amount of the dividends.

Swiss is 35%😁

Nope, for Swiss stocks, IBKR will withhold 35% of dividends, you need to submit a refund to Swiss Federal Tax Administration to request for the 20% refund (i.e. 15% tax treatment) by filling up Form 60.

https://www.estv.admin.ch/estv/en/home/inte...f/malaysia.html

You may send the form to FTA once every 3 years (include past 3 years of withholding tax) and you need to visit the local LHDN/IRB office to ask for verification that you are a Malaysia tax resident.

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For Taiwanese stocks like TSMC, default withholding tax rate by IBKR is 21%, you may however claim back 8.5% (i.e. get the 12.5% tax treatment) by writing to the specific local tax office in Taiwan (e.g. Hsinchu 新竹 for TSMC or UMC) and claim back the tax from them.

 

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if it's $BABA it's the same ole 30% WHT? while if it's HK Baba (9988.HK) it's 10% WHT?

They are smart enough. Form my experience. Canada, Europe, US all with hold correctly.

Erm. Not sure what you mean by "actively investing". I am a very passive investor, hardly changing anything in my portfolio. I remain invested in Nestle, Novartis (through US ADR) and Roche at the moment. They help me weather the current storm well. Will add more in the future when I have more cash coming in.

You don't need a Swiss bank account to transfer CHF funds if you use IBKR. Just use Wise to first convert the money you have (USD, SGD, MYR, HKD etc.) to CHF and store it in your Wise CHF currency balance, then send the money to IBKR's Swiss bank account (a Credit Suisse account) via the usual steps (initiate a deposit notification at IB first, then transfer the money from your CHF currency balance to the designated Credit Suisse account). You should receive your money and see it reflected in your IB currency balance under an hour. From there, you can buy stocks etc. with the CHF funds deposited. Note Wise will charge you 0.5 CHF for the outbound transfer to IB's Credit Suisse account. That's the only fee involved, aside from any forex spread/charges earlier from your USD/SGD/MYR/HKD conversion to CHF.

Add-on, just saw Ramjade's post: you can use IB's own FX conversion if you already deposited SGD/USD/HKD in IB. Note that there is no SGD/CHF or CHF/SGD currency pair, so you will have to go through at least 2 conversions from SGD to CHF, e.g. SGD -> USD -> CHF. I am not sure if the charges are the same as Wise, but the total cost should be comparable.

The unfavourable exchange rates kicks in when you want to reclaim your Swiss WHT. As SNB pays out your reclaimed money in CHF, you need to have a bank account which can receive CHF. I tried out Dukascopy the other day but the charges are ridiculous... So, I just plan to use CIMB SG to receive the inward remittance. The extra cost is the currency conversion from CHF to SGD which has a spread of about 1.1% (for CIMB SG). But the good thing is there are no minimum charges for the inward telegraphic transfer, so you get to receive nearly all the funds refunded.

Last I saw was swiss tax is 35%. I don't think we have treaty with swiss.

4. Dividends paid by a company which is a resident of Switzerland to a resident of Malaysia may be taxed in Switzerland, and according to the law of Switzerland, but the tax so charged shall not exceed: (a) 5 per cent of the gross amount of the dividends if the recipient is a company (excluding partnership) which holds directly at least 25 percent of the capital of the company paying the dividends; (b) in all other cases, 15 per cent of the gross amount of the dividends.

Try not to purchase Level 1 ADRs which are traded OTC like NSRGY. OTC markets are illiquid during times of crisis and may trade at a huge discount to the underlying parent share in SIX. I will advise you to buy Nestle shares on SIX/European ECNs directly on IBKR. You save the ADR dividend handling fees also.

If you search "Swiss" in this thread you will find a lot of useful posts on reclaiming Swiss dividend taxes. https://forum.lowyat.net/index.php?act=Sear...posts&hl=&st=50

E.g. https://forum.lowyat.net/index.php?showtopi...#entry103087454

https://forum.lowyat.net/index.php?showtopi...#entry102601156

https://forum.lowyat.net/index.php?showtopi...#entry103923478

The above posts will answer your questions...

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I sold my Novartis ADR last year after the Sandoz spin-off, and given my remaining positions in Nestle and Roche are relatively small, the reclaimed money is relatively small compared to the amount of effort I have to put in. Below is a calculation I did last year (or the year before, can't remember), to give you a sense of the magnitude of returns over the efforts put in to reclaim your Swiss tax...
We are not multi-billion dollar mutual funds... just poor retail investors...