Consolidating my ETF holdings

My ETFs are held in several broker accounts, as shown below. This is because I have changed broker several times when searching for low cost broker for ETF in US, UK and HK exchanges.

  • DBS Vickers Securities (formerly DBS Vickers Online)
    • Vanguard Total Stock Market ETF (US)
    • ABF Pan Asia Bond Index ETF (HK)
  • POEMS
    • iShares DJ STOXX 50 ETF (UK)
  • optionsXpress
    • Vanguard Total Stock Market ETF (US)
    • Vanguard Emerging Market ETF (US)

Each broker has its disadvantage. DBS Vickers Securities is the only broker I know in Singapore that does not charge custodian fee for US stocks, but its commission is higher than others. optionsXpress, which started its business in Singapore later, charges less commission than DBSVickersOnline, but funding the account is a bit troublesome when I use bank draft from Custom House for its lower foreign exchange spread. Finally, POEMS charges custodian fee and dividend handling fee, though its UK trading commission is lower than others. So, it would be good if there is a broker that is easy to fund and with low commission to hold all my ETFs.

Recently, a friend mentioned consolidating his ETF to Saxo Capital Markets Singapore because of its low commission for UK market, zero custodian fee and zero dividend handling fee. I have explored this option before but put off the idea due to the minimum SGD15,000 requirement to open an account. Later I found out from Saxo customer service that I could transfer in stocks to meet the minimum SGD15,000 requirement. So I decide to consolidate my ETFs to Saxo. The advantages are:

  1. Lower commission than POEMS for UK stocks.
  2. Zero custodian fee and dividend handling fee as compared with POEMS.
  3. Ease of funding: you can fund the account by SGD cheque. Trade done in foreign currency are converted using the current spot rate plus/minus 0.5%. This is close to Custom House rate and lower than banks.

As transferring of stocks from one broker to another incurs fee, I plan to transfer my ETFs only from optionsXpress to get rid of the funding headache, and from POEMS to get rid of the high commission, custodian fee and dividend handling fee. I will leave the ETFs in DBS Vickers Securities because they do not incur on-going custodian fee.

The transfer of my ETFs to Saxo is in progress. I will post update when they are done, so stay tuned.

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17 responses to “Consolidating my ETF holdings

  1. Hi choozm,

    OX can also be funded with SGD cheque. I did that during one of their seminars and was given 3 free trades. SAXO looks good for trading European ETFs. I asked below questions on sgfunds before, but nobody replies. Do you have any idea?

    1. Since EUN base currency is Euro, does trading EUN on an exchange of Euro Zone countries, e.g. XETRA, minimizes currency risk?

    2. Is EUN still the most tax efficient ETF for broad European market?

    3. Is it good enough to replace Infinity Europe Index fund?

    I suspect Lyxor may also launch a European ETF in Singapore.

  2. Hi banyan,

    I don’t have update for (1). For (2) and (3), you can read this sgfunds post and the subsequent follow-up posts.

    Saxo offers access to other European exchange, so Lyxor MSCI Europe ETF, which tracks a broader index , is available. However, its tracking error is not clear. I also hope Lyxor will list a European ETF in Singapore.

  3. Thanks for the link.

    FYI. After opening a SaxoTrader account, you can partial withdraw the initial deposit amount and just leave S$3000 there. So you may not need to transfer (all) ur VTI from OX to Saxo to meet the $15000 requirement.

    It is interesting to know the actual exchange rate Saxo uses compared to OX’s.

  4. Hi Choozm,

    according to the Saxo website, they do not accept cheques – how’d you manage to get your money in?

    “Saxo Capital Markets Pte. Ltd. does not accept Bankers Drafts, Checks or Cash deposits.”

    http://www.saxomarkets.com.sg/singapore/paymentinstructions.aspx

  5. Hi serendib,

    The Saxo broker told me that I can send personal SGD cheque to deposit fund. Also possible to do internet fund transfer but require some additional steps like sending screen shots of the internet transfer (kinda weird).

    I have not tried both. Will update after I have done the cheque deposit.

  6. Pingback: Consolidated my ETF holdings « The Mamak Stall Investor

  7. Hi choozm,

    Always informative your posts here and in the forum.

    From your post I can see that investing in ETFs on foreign exchanges can incur 3 fees
    -commission,
    -custodian fee
    – and dividend handling fee

    Are there others that I missed?

  8. Hi Joelle,

    Yes, those are the fees charged by brokers. Some brokers charge account inactive fee and other fees. Please check with individual broker.

    There are other costs as well. Some government charge withholding tax on dividend. For a comprehensive list of cost, see this HTML attachment in this post (login is required to download).

  9. Hi,

    Than ks for your answer.

    I’ve surfed the various brokers websites and was introduced to “corporate action charges”.

    How would that affect ETF purchase?

  10. Hi, I believe “corporate action” are right issue, merger, share split, etc., which may not apply to ETF except share split. My VTI underwent share split and there was no charge from Saxo.

  11. After talking to a SGX VP in a ETF seminar, I am under the impression that SGX does not favor listing an European ETF. Accroding to them, investors shun the cross-listed US ETFs becoz of the big tracking error caused by considerable time difference. As such, they are worried European ETF won’t work.

    Seems like I have to consider using Saxo for purchase offshore European ETFs. May I know what the charge like to transfer stocks from OX to SAXO?

  12. Hi banyan,

    Thanks for the update.

    To transfer stocks from OX to SAXO, no fee from Saxo but there is outgoing account transfer fee from OX. For other brokers, you need to check with them individually.

  13. Hi Choozm,

    I’m curious to know, if OX can accept SGD cheques, whats other reason for moving to Saxo?

  14. Hi Jerome,

    For OX, since the cash account in OX is in USD, there is currency conversion for deposit and withdrawal. The SGD cheque will be converted for deposit . I called OX for the indicative rate and it was quite high (LINK).

    For withdrawal, you will receive USD cheque to be drawn in a US bank. Depositing such cheque to SGD account will incur commission. I was charged about SGD30 in commission to deposit a cheque from OX.

    My cash account in Saxo is in SGD (though you can choose USD as the currency). No currency conversion for cash deposit and withdrawal. Conversion rate for trade in foreign currency is plus/minus 0.5% of NY time according Saxo website and it is lower than banks.

  15. Thanks for sharing. Looks like Saxo is more convenient. Too bad they don’t offer Options trading too.

  16. Saxo trading rates are not as competitive as OX.

    Links to compare: http://www.saxomarkets.com.sg/private/stocks/rates.aspx

    http://optionsxpress.com.sg/singapore/welcome/commissions.aspx

    I.E: NYSE, for Saxo, shares that are > than $10, per share rate is $0.05, if I purchase 1 lot of a $10 share, cost will be $50. Whereas for OX, at a $0.015 per share rate, it will only be $15.

    For frequent traders, this is a substantial amount. In my case, I only withdraw from my OX account around twice a year. Any commission cost stated by Choozm is negligible if compared to the trading cost.

  17. Hi apons,

    Thanks for sharing.

    At $0.05 per share, Saxo lets you trade up to 300 shares before the commission exceeds the $15 minimum.

    At $0.015 per share, OX lets you trade up to 996 shares before the commission exceeds the $14.95 minimum.

    For me, my trade in NYSE is only for VTI and 1-2 times a year. My trade size each time is way below the 300-share ceiling in Saxo.

    It depends on your trade size and pattern. If you trade large amount of share and trade frequently, then OX is more competitive, as you have pointed out.

    Cheers.

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