[ Updated 6th March 2020 ]
Today, we’re going to take a quick look at Vanguard’s Global Index ETF – VWRD. A fair bit of emails and questions I get frequently revolve around the purchase of VWRD. Thus, I thought this blog post would be great at addressing the common queries.
Disclosure – VWRD no longer forms any part of my asset allocation. I am currently using a robo-advisor, AutoWealth, to manage my global indexing portfolio.
What is Vanguard Group?
Vanguard Group is owned by Vanguard funds, which in turn are owned by investors and clients like us. Under this unique and one-of-a-kind structure, Vanguard must operate “at-cost” – it can charge the funds only enough to cover its cost of operations.
What fund can I buy that tracks global index?
Personally, I see diversification to be possible across
- sectors/industries (financial, technological, oil & gas, etc)
- geographical locations (single country, BRICS, emerging markets, entire world)
- asset class (cash/bond/equities/real estate and property/precious metal e.g. gold/etc)
One of the simplest way to achieve maximum diversification is to purchase a global index fund. Simply invest in the “entire world”. Well, that would kind of “take care” of some sector and geography diversification. It is important to realize that portfolio holdings are capitalization weighted. This means that the biggest companies will take up a larger percentage of the fund, resulting in an ultimately, lop-sided diversification. North America will take up about 55%, for example, compared to Emerging Market’s 9% or Singapore’s 0.6%.
There are various fund houses that offer global index funds – a quick search online pulled up this article by Market Watch in 2012 which listed two mega-funds in iShares MSCI ACWI Index Fund and Vanguard Total World Stock ETF. 3 years is a long time, and both funds have since exceeded $6 billion in net assets. In this blog post, we shall only look at Vanguard funds, largely because of the unique, one-of-a-kind characteristic I’ve highlighted above which puts investors interest as top priority, always.
Index Fund vs ETF
With Vanguard, one can simply buy a global tracker fund. VTWSX is the index fund equivalent, whereas VT (currently holding 6973 stocks) is the exchange traded fund version. Want to know the difference between an index fund and an ETF? Forbes has an article on Index Fund vs. ETFs.
Much of the online resources are based on the US enviroment, and chances are you will come across US citizens buying VTI (US market only) + VEU (World minus US) instead of just VT. Why so? This is because buying VTI (0.05%) + VEU (0.14%) will incur a lower expense ratio compared to VT (0.17%).
Despite the higher cost, VT would be a quick and easy solution. Or, is it?
How is VT related to VWRD? Why buy VWRD instead of VT?
VT is U.S. domiciled. As non-US citizens, Singaporean investors, our dividends are taxed at a hefty 30%. Moreover, investments exceeding $60,000 are subjected to estate tax liabilities. See my post here on building a Bogleheads Portfolio for more details.
VWRD serves as a nice alternative whereby (if I’m not wrong) dividends are already taxed at source. Dividends paid out by the Ireland-domiciled, London listed VWRD would no longer be subjected to dividend withholding tax. Also, estate tax liabilities only kicks in at a much higher investment value.
What is the difference between VT and VWRD?
The major difference between VT and VWRD lies with the fact that VWRD does not include small-cap companies. To me, the fact that both track global indexes (VT – FTSE Global All Cap Index vs VWRD – FTSE All World Index) with physical replication is the most important thing. While returns would definitely not be identical, I can be sure that their charts would be really similar to one another.
While VT is listed on the New York Stock Exchange, VWRL (GBP currency) and VWRD (USD currency) are listed on the London Stock Exchange. Do take note that dividends paid out by both VWRL and VWRD are in USD currency.
Does VWRD pay out dividends?
Yes, they do so quarterly. See the distribution schedule here.
In case you’re interested, the next ex-date is 19-March-2015.
Where can I obtain VWRD dividend history?
The full quarterly dividend history is on Vanguard courtesy of my reader, Max. Thanks!
There is no full quarterly history available as far as I’m aware of.
You can check the annual VWRD dividend history on MorningStar.
How can a Singaporean buy VWRD?
See my post here on building a Bogleheads Portfolio for more details.
What will happen to my investment if Vanguard goes bankrupt?
From my understanding, in all likelihood it is not possible – see the first point. Vanguard Group is owned by the funds, and the funds then contribute money to fund Vanguard Group operations. Not the other way round since Vanguard Group does not own the funds. For Vanguard Group to go bankrupt, all the contributing funds must be bankrupt too, meaning the world as we know it have gone KAPUT.
Hi there, quite an informative article.
I was also researching into Ireland domiciled ETFs recently and came across SWDA. The biggest advantages over VT are that it’s listed in LSE, domiciled in Ireland and best of all, it’s an accumulating fund, meaning that no dividend is paid out and therefore no tax on those.
What do you think?
Hi Jeremy,
Great find! Looks like a decent ETF – physical replication with low expense ratio (0.2%) and huge $3 billion asset size. The re-investing dividend nature is really worth looking into. One important point to note is that SWDA tracks MSCI World Index which only includes developed markets (23 countries) compared to VWRD’s FTSE All-World (developed and emerging = 47 countries).
Both funds would do decently well for the average investor I assume, since emerging markets probably make up 10% of market capitalisation only. Thanks Jeremy for sharing!
Hi Kelvin,
is VWRD still listed in London exchange? I am using standard chartered platform but I cannot find the ticker. The closest one is VWRL.
David
Hi David,
It is. When I use the StanChart platform it doesn’t show up when I use the search function, but I can still purchase it using ticker VWRD. Weird, but true.
Hi Kelvin,
can you advise if you have incurred a stamp duty charges from buying your VWRD from London exchange from SCB? are you aware of any other trading platform that does not have stamp duty charges and no custody fee?
David
Hi David,
I can’t recall but I have a feeling I didn’t incur the said charges. Sorry! I do not know of other platforms that is as “generous” as StanChart.
Hi Jeremy, SWDA looks like a very decent alternative to VWRD which is what I currently hold. My big gripe about VWRD is that liquidity is very poor, resulting in large bid/ask spreads – how is liquidity in SWDA?
Ref your comment on tax – I think this is a wash between SWDA and VWRD. Both are domiciled in Ireland hence both are hit with 15% WHT by the US. IIRC there is no WHT between Ireland and Singapore. So its a question of whether you want your dividends in cash or reinvested automatically.
Ref Kevin’s comment on lack of EM exposure, that could be addressed by holding a low-cost ETF like VDEM (I’m also vested in VDEM currently)
That’s a good point on the dividend witholding tax between Ireland and US. If that’s the case the accumulating feature doesn’t matter to us anyway since we have no capital gain tax.
As for the liquidity, it looks more or less like VWRD, which is around 0.15%, is that right? I feel that over a long period of time, the spread doesn’t make that much of a difference, and is an acceptable trade for avoiding estate tax(? TBC).
Thanks for the info, and giving me a push to dig out more info on these ETFs!
Wow nice work you have here. By the way, I notice you have a 10% allocation to REITS. by any chance is that capital mall thrust?
Oh and here’s the link to VWRD quarterly dividend history
https://www.vanguard.co.uk/uk/portal/detail/etf/overview?portId=9505&assetCode=EQUITY##pricesanddistributions
Hi Max,
Thanks for your kind comments. I realized a good number of visitors are new to investing or simply looking for an alternative strategy so I’m attempting to provide some easy-to-understand information to this select group of audience who is interesting in index investing.
I have CapitaMall Trust, FraserCentrepoint Trust as well as MapleTree Commercial Trust in my REITs allocation – nothing fanciful, but very solid SG-based retail REITs.
For the life of me I simply couldn’t locate the quarterly dividend history the last few times I tried. Arigato!
This is interesting. seems like its worth exploring into. looks like you have form your “mini REIT etf in SG context if you keep adding different REITS from diff sector. with this, the yield would be a lot higher than those Global REIT ETF out there. And by doing so, its more tax efficient compare to Philip SG REIT fund (there’s tax in the fund like ard 14% of dividend income).
maybe i’ll consider this too next year when I have more time. =X
Hi Max,
Yes, indeed one can easily do it with the 100 lot size. Too much effort, in my opinion – no time ah! I shall stick to my retail REITs for now heh.
Hi Kevin,
I have substantial holdings in A35, ES3 and VTI which I started buying 2 years ago. Although VTI does not give good dividend due to the witholding tax, it does provide me with very good capital gains. I’m now searching around for a good ETF which can provide better world exposure to complement my VTI holdings. Hopefully, it’s not US domiciled so I can do away with the witholding tax. Any idea? 🙂
Hi Fanny,
Thanks for commenting. The VTI has been awesome over the last 3 or 4 years and would be the star component of your portfolio! My idea of the perfect complement would be VEU which holds everything outside of VTI. Unfortunately, it will be subjected to div. withholding tax as well. I don’t exactly have a suitable alternative in mind at the moment but I’ll post them here if I come across any. Cheers!
Hi Kevin,
VEU sounds like a good plan, though it still doesn’t avoid the dividend tax. Thanks for the recommendation 🙂
Hi Kevin, i’m interested in buying VWRD as the 3rd part in a lazy portfolio. As i’ll be only purchasing once a year, the suitable account should be with SCB, correct? Would S$1200 be suitable to invest once annually? or should i break up this S$1200 into 4 and invest quarterly? The amount of $1200 is just a figure i’m working with. It could be more or less as i don’t have a stable cash flow
Hi Kelvin!
By suitable account if you’re referring to lower cost, then SCB is a good option due to lack of minimum commission. This is my personal choice as well. Note that their exchange rate is not that fantastic, though.
To me, there is no right or wrong answer to investing e.g. $1,200 all at one go or split them up. Either method could come up tops as we are at the mercy of Mr. Market. I usually split the risk and invest in portions. There are people who do it annually.
You mention that the inheritance/estate tax in Ireland hits in at a much larger value than its U.S. counterpart. Do you know the exact number? I haven’t been able to find any official resource, only blog posts stating that NRAs are exempt from it.
Thanks for the great post!
Hi Mx,
To the best of my limited knowledge, the official answer is that there are different tiers depending on the beneficiary relationship. For example, spouse is exempted whereas children is capped at $250,000. You can see the link below for more information.
http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html
As always thanks for the informative analyses and suggestions!
I have been contemplating on getting VWRD, and recently I gave a call to DBS Vickers if I could make a purchase from London Exchange. Person answered my call told me that it would cost more in commission to purchase from London Exchange (like 1~2%) due to small volume of transaction.
I have my other ETFs such as A35, ES3 and VTI in DBS Vickers. I would like to ask if it is common for people to have multiple accounts (Vickers, Stanchart etc) and purchase respective ETFs? Would rebalancing be difficult? Which account would you recommend for VWRD?
Sorry for asking such elementary questions! ^^;
Hi Walter,
Thanks for commenting! Your question isn’t elementary at all! I personally have DBS, POEMs and SC but my entire portfolio is in SC. I have no idea how other people manage their portfolio though. I would assume a single brokerage is simpler.
SC have pretty bad exchange rate when buying VWRD but only they have no min. commission which is why I use them. With respect to ease of reblancing, are you concerned with the time required or the cost?
A hypothetical question: if a singapore resident had a portfolio built in SG with ES3 and A35 (using SCB platform), then he/she relocates to Ireland for some reason, would buying VWRD then (using a local broker) be a better option in any way? Overall, he/she would still have exposure to the 3-fund approach but in 2 different brokerage accounts. I’m not sure I fully understand the tax witholding part on the dividend, hence contemplating if one can save money while investing in VWRD in any way possible.
Hi Aadi,
No personal experience in what you mentioned, but the concerns are the same wherever you are in the world.
a. What is the cost of obtaining the currency to purchase the desired fund?
b. Tax concerns e.g. dividend withholding, estate tax, etc. Hope my post of dividend withholding tax helps a little, but I’m not professionally trained in that area.
Thanks for your reply!
I assume rebalancing is not easy, in terms of timing. I have not actually got down to “sell” and immediately “buy”, and frankly no idea if it can be done simultaneously or takes few days in between “sell” and “buy”. Moreover, if it is over 2 different brokers, the process maybe a bit more complex? Not exactly sure.
But more importantly, cost is a concern, since we all go for ETF for that reason. So when I was told that it would cost 1-2% in DBS, I had to look for the alternative.
Thanks for your input! 🙂
Hi Walter,
No better way to try it out for yourself in future! That’s how I learnt about many of the things I blog about.
Best Regards,
Kevin
hey Kevin!
First off, great blog! very user friendly 🙂
i have a question about standard chartered,
i just bought VWRD stocks, and im wondering about how dividends will be paid.
will it be reflected in my “FCY SECURITIES SETTLEMENT ACCOUNT” or would i need another USD account in order to access it?
thanks so much! 🙂
-Dobbie
Hi Dobbie,
Thanks for commenting! Dividends will go straight into your FCY SECURITIES SETTLEMENT ACCOUNT. In fact, I just received my quarterly dividends today!
Best Regards,
Kevin L.
ah cool! good for you 🙂
i see you’ve also written the quarterly dividends for VWRD on your home page. Thanks! This is super helpful, cant wait for next quarter payment on Sept 17!
What do you guys think of IWDA that has a lower TER and reinvest dividents (avoid 15% tax) ?
https://www.ishares.com/lu/individual/en/products/251882/ishares-msci-world-ucits-etf-acc-fund?siteEntryPassthrough=true
Hi Norman,
I also think that SWDA/IWDA would be a valid alternative to VWRL/VWRD for global diversification. However, do keep in mind that IWDA consists only developed markets, while VWRD covers developed and emerging markets, so depends how much is considered enough diversification.
Also, note that although IWDA is an accumulating fund, it is subject to dividend withholding tax (DWT), just that it is hidden/paid like the fund expenses, within the increase in net asset value as and when the dividends are re-invested. According to the 2014 Annual Report (https://goo.gl/843xX2) p174 & 176, DWT for IWDA ~11.6% vs VWRD ~9.8% (https://www.turtleinvestor.net/get-to-know-dividend-withholding-tax/). VWRD distributes dividends so you actually see the effect of dividend withholding tax in the net dividends you receive.
So when selecting between VWRL and VWRD, basically it comes down to the slightly poorer FX rate that SC offers on GBP, and nothing else? Trying to make a decision re. which one I should be buying.
Hi Nick,
As far as I know, yes. I assume that you are aware that VWRL issue dividends in USD as well. Of course, this means that with VWRL, you are handling two currencies (GBP/USD) as opposed to VWRD which is one (USD).
Hi sorry for the noobish question: but im not able to find the charges need to buy the necessary units of VRWD.
Other than the divs will come already taxed, im keen to know where i can find out:
1. The charges for buying – assume my platform charges $0 for ease of calc
2. The charges for selling my units – assume my platform charges $0 for ease of calc
Hi CQ,
I just tried it out for you, assuming I place an order for $63.
Estimated Transaction Amount (Buy) –
Trade Consideration : USD 63.00
Client Commission : USD 0.1575
UK PTM Levy : USD 0.00
UK Stamp duty : USD 0.32
Total Transaction Amount : USD 63.4775
Estimated Transaction Amount (Sell) –
Trade Consideration : USD 63.00
Client Commission : USD 0.1575
UK PTM Levy : USD 0.00
UK Stamp duty : USD 0.00
Total Transaction Amount : USD 62.8425
Hi Kevin, thanks much for the revert. Sorry for the late reply also.
Just opened an SC account and seem that VWRD is not avail ont he LSE option. Only VWRL, getting SC to check for me.
Hi CQ,
Hope SC gets back to you on this. It is a known issue that although you cannot see or list VWRD on stock watch, you can still input the stock code and purchase it.
Hi Kevin,
I have read your related posts on VWRD; establishing the 3-fund Boglehead portfolio; the issues on dividend and estate taxes , investing via SCB etc.
Some noob queries here:
1) there is an ETF n SGX, the S&P 500 (ticker S27) that may approximate the VWRD (i understand S27 is heavily concentrated in US firms), since the returns of the VWRD and S27 has been largely similar.
However, judging from forums,there seems to be far more interest in VWRD , compared to S27. I must admit two factors hold me back from vesting in VWRD: firstly, more historical data on S&P500 (founded in 1950s compared to FTSE All-World Index in mid 1980s); and higher returns from S&P500.
I understand the S27 may be less liquid than VWRD, however, is it worth going thru all the trouble to invest in VWRD (shares denominated in USD; traded on LSE), just because of the liquidity issue ? Or am I missing something else here ?
2) iShares offers a similar product – the IWDA which tracks MSCI All-world index.
I understand it is not exactly the same as VWRD.
However, the attractive aspects as its auto-reinvestment of dividends ; higher returns, plus lower TER of 0.20%; slightly longer fund history and track record (created in 2009 compared to VWRD in 2012)
I am wondering why isn’t there greater interest in IWDA ?
Simply because of Vanguard’s ownership structure that is supposedly more aligned with its fund-holders ?
Appreciate if you can enlighten pls, thank you.
Regards,
KH
Hi KH,
Woah, long comment (excellent questions too)! I’ll try to give my inputs as best as possible.
1) My personal take is that it isn’t about liquidity to me. VWRD (world index) and S&P 500 (US index, can simply take it as 500 largest firms) are fundamentally different things. There would probably be similarity because in terms of weightage, US is approximately 55% of the entire world. What I wanted was global exposure – I don’t just want 500 largest firms in the US. VWRD gives me approx. 2900 stocks in 47 countries by simply buying one unit costing less than US$70. If you only want S&P 500, you’re probably better off buying S&P 500 UCITS ETF (VUSA) on LSE which halves your dividend withholding tax.
2) Yes, VWRD and IWDA can be considered alternatives to each other. To me, the auto-reinvestment of dividends doesn’t really count as much of an advantage. Dividend Withholding Tax has already taken its cut, so it is really a matter of whether you wanna deal with the spare change in USD that is auto-deposited into your account. To be honest, I have no idea why there is less interest in IWDA. My reason for choosing VWRD lies in its unique ownership structure, as you have mentioned, despite the advantages of IWDA. IWDA is a perfectly good option, in my opinion.
Kevin L.
Hi there,
is there an accumulative version of the VWRD? I am interested in it but i don’t want to pay withholding tax as a non-resident non-us person.
Thanks.
Hi Charb,
Although not Vanguard, iShare IWDA is a similar product to what you’re looking for.
Thanks Kevin for your reply.
I realize that, but IWDA does not cover quite as much as VWRD does, whether in European, Asian and undeveloped markets.. On Blackrock’s website, when you find a product you have the option to find a similar product that either Distributing or Accumulating. Vanguard don’t have that option, that is why i am asking in here. the same VWRD product but accumulative.
None that I know of, sorry!
Personally struggling between deciding between VWRD and SWDA for a longg time now. Started ES3 in the mean time. Got a couple of questions.
Basically SWDA covers only developed markets, has a lower TER and does dividend reinvestment?
But VWRD has an additional emerging markets component and gives dividends?
However both purchase would be through SCB? At what point does it become more cost effective to use Interactive Brokers?
Also would investors buying either etf face forex risk?
Lastly I have some Nikko am STI ETF shares from previously, when lot size was in 1000/lots. But have since switched to es3. Would it be worth it to do a switch of current nikko am sti etf shares to SPDR sti etf?
Hi DJ,
Basically you’re right I suppose. SCB is just a broker, and you can use any broker you want. SCB just don’t have min. commission 🙂
I haven’t done the Maths but some say the breakeven point for IB is $100k. (not verified!)
As far as I know, forex risk is always present (even for STI ETF) due to the underlying businesses who make their earnings globally.
Personally I did the switch to SPDR for simplicity, sold all of Nikko and bought SPDR.
Thanks for the reply Kevin. I guess VWRD vs SWDA is a personal choice thing? Yours would be vanguard’s group structure as you mentioned above.
Correct me if i’m wrong, you receive the dividends from VWRD in your USD settlements account and reinvest them back?
Market timing isn’t good index investment behaviour, but I feel like switching sti etfs by buying es3 now and then selling the nikko next time 😛
Yes, it is a personal choice for me. You’re right, the dividends issued in USD goes straight into my USD settlement account.
Hahaha, STI is rather “cheap” nowadays huh? If you have more questions feel free to join our Facebook group and ask!
hi, i read the comments in this blog and i am a bit confused. if there is no withholding tax for VWRD, does that mean if the dividend declared by the combined stocks is $30 USD, the amount the investor of VWRD receives will be $30, since there is no tax at all? another question: if SWDA/IWDA are reinvesting dividend and there is withholding tax of 30%, so if dividend declared by combined stocks $30, the amount of dividend which will be reinvested back into VWRD will be 0.7 * $30? btw what is the difference between SWDA and IWDA? anyway, i think you are doing a good job on the blog, maybe it would be great if you could summarize the ETF in a table with Rows as e.g. “Listed in which exchange”, “dividend payout type”, “currency”, “coverage”, “Tax” and Columns as e.g. VWRD, VWRL, SWDA, IWDA…. 🙂
Hi Cheryl,
Thanks for your suggestion, I shall try to do it 🙂
a. Yes
b. Yes
VWRD/IWDA/SWDA are all subjected to dividend withholding tax. See link for more information!
https://www.turtleinvestor.net/get-to-know-dividend-withholding-tax/
c. SWDA vs IWDA = Different Base Currency. See link for more information!
https://www.justetf.com/uk/news/etf/the-effect-of-currencies-on-etfs.html
Kevin L,
I would like to diversify into 4 categroy.
I understand that you are recommended Vanguard FTSE All-World UCITS ETF (VWRD) for world category. If wannt to further to breakdown world into Euro, China and US, what would be your recomended ETFs for each of them?
Thinking that get ourself prepared to buy China ETF, as the China is sinking.
1) SG – SPDR STI ETF (E3S)
2) Euro – ?
3) China – ?
4) US – ?
KKH
Hi KKH,
I must state my disclaimer that I’m not very familiar with what you’re asking for, so this is really my “educated guess”.
All on London Stock Exchange for Ireland-domiciled ETFs – I’m assuming that the same dividend taxation benefits kicks in. Vanguard and iShares are among the largest ETF providers, thus low fees and physical replication.
Europe : Vanguard FTSE Developed Europe UCITS ETF (VEUR)
US : Vanguard S&P 500 UCITS ETF (VUSA)
China : iShares China Large Cap UCITS ETF (FXC)
Again, note that these are suggestions rather than recommendations. Pls your homework!
Thanks a lot 🙂 . Kevin.
Hi Kelvin,
I am new to ETF and I am looking at VWRD to replace one of my mutual fund.
I understand that if I get VWRD from London exchange I will have a 15% withholding tax saving. Are you able to advise the following?
1) Is there a difference between VWRD and db x-trackers MSCI World Index UCITS ETF (USD) from Singapore exchange?
2) Is there a 30% withholding tax if I get db x-trackers MSCI World Index UCITS ETF (USD) from the Singapore exchange.
3) or is it better to get VEU and VTS from Australia exchange as there is no estate tax.
Thank you for sharing and look forward to your reply.
David
David
Hi David,
I’m afraid I don’t have answers for specific ETFs or geographical locations for you, but I can give my take. Take them with a huge pinch of salt OK?
1) Tracking different benchmarks, for a start. VWRD uses FTSE, but DB x-trackers use MSCI. But in theory, they should fulfil the same purpose.
2) Even if DB x-tracker is listed on SGX, the fund is still domiciled in South Africa if I recall correctly, which means you still have to figure out the withholding taxes, if any. Plus, on SGX the trading volume is going to be smaller, resulting in larger spread hence higher costs. Remember that it doesn’t matter where the ETF is listed, the important thing is where it is domiciled.
3) I’m not familiar with Australia Exchange, but a quick Google told me that both VEU and VTS are domiciled in US too, which therefore respects US estate taxes and not Australian estate taxes. This is different from VWRD (domiciled in Ireland) or for example, Canada-domiciled ETFs listed on Toronto Exchange.
Note that I *could* be wrong on the above though. Pls do more checks!
Hi Kelvin,
thank you for your reply.
1) Does that mean that iShares Barclays USD Asia High Yield Bond Index ETF that is listed and domiciled in Singapore will have no taxes at all? So I should look for ETF that is domiciled in Singapore or at least have some form of tax treaty.
2) also what sort of dividend yield for the VWRD are we looking at after 15% tax base on your holding.
I am also concern about the estate tax as it is shown that the non taxable bracket is getting lower over the years and the value of ETF will be getting bigger as time pass.
thank you once again.
David
Hi David,
1) To be honest, I’m not 100% sure. Domiciled in SG so I would assume no estate taxes. But in terms of dividends flow, they come from other countries into Singapore. I’m not sure what are the tax agreements, if any, governing the flow of dividends into Sg. That you might have to Google a bit to find out. Sometimes finding products domiciled in Sg isn’t that easy. We are a small market after all.
2) You can check out their dividend history – I have them on my site too. Based on last 4 distributions and today’s price, approximately 2% after withholding taxes.
Hope this helps!
This is a great fund to compound your money for retirement. But I think it’s safer to use any brokerage which charges custodian holding fee i.e S$2 per month. At least your VWRD stock will remain in a custodian account rather than the brokerage ‘s Asset column. Just in case something bad happen to StanChart,your stock is still safe in custodian account.
Most brokerage charges about 0.7% for UK stocks. I think sometimes high commission ‘encourage’ investors to hold rather than trying to time/trade the market.
Just my 2 cents
Hi Kelvin,
I found your blog while researching on alternatives to VTI or rather a global index, as I have just sold all of my VTI due to the US real estate tax. I am now undecided between VWRD and VXC which is listed on the Canadian exchange . Both are global indexes . Could you please advise or offer some thoughts on VXC?
Thanks so much !
Hi Kevin,
After reading through tons of posts by you and HWZ’s Shiny Things, I’m convinced enough to go with the 3 ETF strategy. Thanks for that!
Question: How do you get your USD for buying VRWD? Do you just buy USD on SCB and tolerate their rates?
I was wondering if I could buy USD using DBS’ Multi Currency Account and transfer to SCB.
But I couldn’t find an easy way to do an interbank transfer of USD.
Thanks!
Hi Choon Yan,
Yeah, I just went with SCB and its poor rates. Not too sure about your idea – think you can ask DBS directly about it?
I’m considering fine-tuning my investment process. I may liquidate all my VWRD and use robo-advisors as a proxy since they already have exposure to global equities/bonds. Still simmering my thoughts about it though.
Hi Kevin. Nice site! I’m currently invested in VWRD (80%) and IAAA (20%). I’m currently living in Tel Aviv, however have no plans to return to my country of origin, the UK. Any suggestions for a third fund?
Thanks Gabe! Seeing you’re a citizen of the world (no bias towards a home country) and have VWRD and IAAA which are both global ETFs, I doubt you would need to complicate your portfolio any further. If I were you, two funds would be enough.
.. Unless you have a reason for adding a third?
Hi Kevin,
Do you think expense ratio is a concern?
Quick glance at Vanguard site, those tracking S&P have expense ratio around 0.1%, whereas VWRD has expense ratio of 0.25%.
Will the difference in the expense ratio outweigh the withholding tax advantage?
Hi Jonathan,
Nobody knows! That’s the beauty of the game. We all have to be responsible for our decisions. Long term, I’m probably leaning towards robo-advisors, which generally utilize US-listed ETFs (lower expense ratio, higher liquidity).
Is there stats that shows robo-advisors performance? maybe against major index?
I’m looking at AIEQ ETF, quite interesting. Not sure if that is consider as robo-advisors.
Sure, but you’ll have to look hard, or punch in the ETFs (using portfolio tools etc) to generate your own returns.
Everyone will have different entry points, different risk profile and therefore different ETFs invested with different dollar values.
AI ETF is a different thing, though. ETF is basically a basket of stocks, right? So an AI ETF just determines the basket of stocks.
Robo-advisors is higher-level, or more macro. It uses ETFs to construct a portfolio.
got it, thanks for sharing!
Dear Kevin,
Thanks for creating this platform for baby investors like myself.
It’s been a god-send as we navigate this mind-boggling mine field of finance!
I am thinking of investing in VWRD.
I know that in buying this counter, I have to contend with the following
(my current broker is POEMs)
1. monthly custody charges (S$2.14)
2. Commission 0.4 % (min GBP 25)
3. stamp duty 0.5%
However, I am wondering how much of the dividends I will actually receive at the end of the day.
So basically, my questions are:
1. Is the dividend payout straightforward or are there other hidden costs?
2. Can we opt for the dividends to be in S$?
3. Has this counter been a good investment for you over the years?
4. What has your experience been like?
Thank you for taking the time to read my comment.
Hi June,
Thanks for your comments! A quick check (via StocksCafe) showed that VWRD dividend yield is about 1.6% now.
1. The dividend is paid out in the denominated currency which is USD. It was straight-forward when I invested via StanChart previously. 15% dividend withholding tax, the rest is deposited into my USD-currency account. One thing to note is that VWRD is a world index ETF and not generally held for the main purpose of receiving dividends, but it is nevertheless a nice thing to have. If you don’t want to deal with USD dividends, VWRA is the accumulating version of it, I think.
2. No.
3. VWRD (and the world’s growth) has been phenomenal. Just search for the VWRD price chart 😉 Investing in this counter is equivalent to investing in the world’s growth – is that something that you have faith in?
4. VWRD is nothing more than a physical ETF that tracks the FTSE All-World Index. Purely passive 100%. I don’t have any experience to speak of besides buying and holding (in the past). I have since sold all my VWRD after switching to AutoWealth.