I login to my DBS Vickers online account in November and noticed a mysterious fee charged to my account. It is the custodian fee for foreign stocks, which dbsv started charging in August silently. The amount is $2.14 per month per counter including GST.
To transfer the stocks outside to other broker, there is a fee of S$50 per counter. This is more expensive than doing a sell and a buy to transfer the stocks.
So I sold all my holdings from dbsv in November – vanguard total stock market ETF (VTI) and ABF PAIF Asia bond index ETF (2821.HK). I plan to use standard chartered bank to buy the ETFs back but have not gotten the time to do so.
As to dbsv, you were the broker I used to buy my first ETF (VTI) in 2005 when you were the only local broker who didn’t charge custodian fees for foreign stocks. So long and thanks for all the fish.
With the cash built up from the delayed contribution in October 2010 and April 2011, I have finally made the purchase in July and August. The delay was because (1) I have been trying to get Saxo to offer two global bond ETFs in London Stock Exchange since October 2010, which Saxo finally added them in May 2011, and (2) I was evaluating and setting up Standard Chartered bank online trading in July 2011.
Following my asset allocation plan, I have bought the funds below (through the broker stated in brackets):
- iShares MSCI Europe ETF (Saxo)
- Lyxor Asia Pacific Ex Japan ETF (SCB)
- Lyxor Japan ETF (SCB)
- iShares Citigroup Global Government Bond ETF (Saxo)
On the other hand, I have taken the opportunity in the recent rise of bond price to sell Legg Mason Global Bond Trust, an actively managed unit trust fund. Following the sale, I do not have any actively managed fund in my portfolio, except UOB GrowPath 2040 in CPF SA. I will allocate the sale proceed to US equity, again, according to asset allocation plan.
Posted in Bonds, ETF, Investment, My Portfolio, Stock Broker, Transaction
Tagged active, Activity, buy, ETF, My Portfolio, sell, unit trust fund, year 2011
I opened Standard Chartered Bank (SCB) Online Trading in June, with settlement acounts in SGD, HKD, USD, EUR and GBP currency. I waited for another 3 weeks for the W8BEN form to be processed, so that I could start to use the USD settlement account.
The main attraction is that there is no minimum commission for trading in major stock exchanges around the world, so it is very good for small transaction, especially if you want to do monthly contribution into ETF. Read the Brokerage & Market Fees, FAQ and this post by hyom. Besides the questions raised n FAQ, I also gathered the following information by calling the online trading hotline at 1800 242 5333 (don’t call the general hotline as the officers are not equipped to answer online trading-related question).
- All shares are held in SCB.
- No monthly custodian fee.
- No dividend handing fee.
There are two other things to note: currency exchange rates and ETF listed in London Stock Exchange.
Currency exchange rates
I compared SCB currency exchange rates with that of Oanda.com for a random couple of days, see the spreadsheet below (or open the spreadsheet here). As you can see in the last column (Amount % Difference), HKD rate is consistently bad while others fluctuate. I have only transferred money to USD account and did so when the Amount % Difference is in the 0.5–0.6% range.
ETF listed in London Stock Exchange
According to London Stock Exchange (LSE) webpage on ETF, ETFs attract no stamp duty. The two brokers (POEMS and Saxo) that I have used to purchase ETFs in LSE follow this rule and did not charge stamp duty.
For SCB, you will have to pay the stamp duty of 0.50% on buy trades. I called up SCB, cited the webpage and asked if there was a mistake and whether stamp duty would be refunded if the transaction in LSE was a ETF. SCB said they would call back. Few days later, SCB called me and said all buy trades in LSE will attract stamp duty. Huh?
So how much commission in total (including stamp duty) will I be paying when I use SCB compared to Saxo? See the spreadsheet below or open the spreadsheet here. SCB is more expensive than Saxo when your trading amount is only slightly over $1000 ($1066.67 to be exact). This means SCB is only cheaper when you trade below $1066.67.
The ETFs and REIT shares that I use in my portfolio are listed Singapore exchange, US stock exchanges and London stock exchange.
- I am inclined to use SCB for transaction in Singapore exchange and US stock exchanges.
- I will continue to use Saxo for transaction in London stock exchange.
- For currency exchange, I am OK with the hassle of comparing the rate in SCB with Oanda.com each time before initiating the transfer.
Update 7-Aug-2011: IGLO and IGIL are now available for trading in Saxo since mid-May 2011. The commission is charged in USD, converted from GBP at Saxo prevailing rate.
I posted HERE that I may consider bond ETF in London Stock Exchange following the reduction of Saxo commission from GBP 15 to GBP 8. But alas, when I asked Saxo to add the following two global bond ETFs, Saxo replied that they were not able to add because these ETFs are traded in multiple currencies (GBP and USD).
When I probed further and informed Saxo that the two ETFs have different stock symbols for different currencies, Saxo replied they still could not add them because they share the same ISIN number on the same exchange.
Ok, let’s try POEMS. I emailed their tech support to add these two ETFs. And on the following day, it was added! So now you can buy the two ETFs in POEMS, just note that the ETFs are traded in GBP and their symbols are:
However, there is a catch: POEMS charges a higher commission (GBP 25) compared to Saxo. Given this, I am undecided whether to use POEMS or not.
I received this email from Saxo last week:
… the minimum commissions charged on stocks traded on the following exchanges will be lower from 1 May 2010:
- Euronext Amsterdam (AMS) from EUR 20 to EUR 12
- Euronext Brussels (BRU) from EUR 20 to EUR 12
- Euronext Lisbon (LISB) from EUR 20 to EUR 12
- Euronext Paris (PAR) from EUR 20 to EUR 12
- Frankfurt/Xetra Stock Exchange (FSE) from EUR 20 to EUR 12
- London International Exchange (LSE_INT) from USD 40 to USD 20
- London Stock Exchange (LSE_SETS) from GBP 15 to GBP 8
- Milano Stock Exchange (MIL) from EUR 20 to EUR 12
- OMX Helsinki (HSE) from EUR 20 to EUR 12
- Sistema De Interconexion Bursatil Espanol (SIBE) from EUR 20 to EUR 12
- Swiss Virt-X (VX) from CHF 30 to CHF 18
- Swiss Exchange (SWX) from CHF 30 to CHF 18
- Wiener Börse – Vienna Stock Exchange (VIE) from EUR 20 to EUR 12
Saxo Capital Markets will raise the minimum commissions charged on stocks traded on the OMX Copenhagen Stock Exchange (CSE) from DKK 19 to DKK 29.
The reduction of commission for London stock exchange is almost half. Great! Now I only need half of the previous investment amount to achieve the same ‘sales charge’.
With this low commission, I may also consider bond ETF in London stock exchange when I need to add to my global bond asset class. Currently I use unit trust fund for global bond asset class. Below are the global bond ETFs in London stock exchange that I may use:
UPDATE (Oct 27, 2010): Since April 2010, Saxo has been crediting dividends from London Stock Exchange to my account in full, without the 20% withholding tax.
After I consolidated my ETF holdings to Saxo
in June, the first dividend from my ETF in London Stock Exchange was declared in my Saxo account in July. But wait, how come they were taxed at 20%? They were not taxed at all when I held the ETF in POEMS. After I have sent an email to Saxo, the withheld tax was refunded to me before the pay date in August.
The second dividend was declared in October. Again, it was taxed at 20%! After a few emails to chase for the refund, it was credited into my Saxo account after the pay date.
The ETF pays dividend four times a year. It is going to be a pain if I need to email for tax refund for every dividend payout. And if Saxo decides not to refund withholding tax (e.g. change in custodian structure), it may be time to do another account transfer, sigh…