There should not be any issue with S&P 500 or small cap because the Australian domiciled fund can invoke DTT with USA. Investing overseas is important for Australians. Thank you for your response, that is a very valid point. Press J to jump to the feed. Reasons to consider Radeon RX 5700 XT: 18% higher gaming performance. The way block trades work is that market makers – usually at the request of ETF providers’ capital markets desks – source the underlying securities then put a creation order through. And as Australia only makes up 2% of the global GDP, its crucial for investors to go overseas. By
IWLD only just reduced their fees a couple of weeks ago. There is no need to work until to you are 65+ in order to access Superannuation benefits and retire. Specifically, IWLD can get some of that double tax back.
However iShares Australia (BlackRock) have said that they plan to change to full replication, holding each underlying share directly, instead of just holding underlying funds which contain them, when (if?)
If you have lots of other AUD assets (investment property, piles of cash, etc) this might be fine. - IWLD currently quite a bit cheaper since they dropped the price a few weeks ago, - IWLD also contains small caps for both US and ex-US so this is a nice plus over VGS, - IWLD misses US mid caps (which is odd, but not necessarily bad), - IWLD although Australian domiciled so no US estate tax problems, still contains non-Australian-domiciled funds within it instead of holding each of the underlying stocks directly, meaning, A) You don't get the tiny bit of franking credits (probably insignificant). Whereas they pay the spread every time they buy and sell. But if the ETF portfolio is going to represent the vast majority of your wealth, you probably want at least 50% of it to be in AUD. We take a look. I have got AU$200k and EUR 18k in savings (I only recently overcame my fright of investing!)
VGS vs IWLD. This might be a strong point if your current power supply is …
The glamorous IT and pharmaceutical sectors, which have proved such a boon for Swiss and US companies in recent years, are mostly missing in Australia.
This cash acts as a drag on performance in a rising market (and creates tracking error, discussed more below). These mostly concern taxation, which is particularly critical for the iShares Core MSCI EAFE ETF (IEFA), which is IWLD’s second largest holding. Well, to simplify egregiously, most governments have agreements that stop the doubling up of taxes on foreign investors.
This could be achieved by increasing the VAS proportion, or adding a currency-hedged international ETF (such as VGAD, which is a hedged version of VGS).
For example, Nestle is a Swiss company and IEFA's biggest holding, meaning Swiss taxes apply. David Tuckwell. MER is really attractive for IWLD but VGS is all I ever hear about. IEFA invests in companies based in rich European and Asian countries (including Australia). Until then they were only a couple of basis points below VGS so not significantly different, and Vanguard has a reputation for being on the side of investors due to the (original) US arm of Vanguard which was setup to literally send profits back to people who purchase shares in their funds, ie it is essentially owned by their customers. I think I once read that hedged ETFs do not perform as well in the long term as unhedged ones - do you think that dollar-cost-averaging my savings into unhedged ETFs will be sufficient to offset any currency risks?
In other words; for the IEFA (34% of bucket) and XIC (3.5% of bucket) underlying funds - will we be able to claim foreign income tax offsets for foreign withholding taxes paid to avoid double taxation, and if not, what is the effective impact on MER (for a fair comparison with VGS). track a market index rather than taking bets on individual companies Both do so by tracking versions of the MSCI World index, which is perhaps the most famous global share market gauge. The FoF approach has the benefit of making things cheap. that I'm missing? A final concern for IWLD is how its is actually put together, and whether the underlying ETFs allow it to accurately track its index. Thanks! VGS has the advantages of coming in a neater package, with lower internal costs and better trading. Cookies help us deliver our Services. Why not retire at 45? VGS invests directly in shares whereas IWLD is a fund of funds that invests in other ETFs; Both ETFs have very similar dividend yields because both invest in a similar range of international companies; IWLD invests in 3,800+ shares compared with 1,500+ for VGS. My concern was that because it has overseas ETFs within the ETF you purchase that is funds within a fund, it would be less tax efficient because the foreign withholding taxes paid by the US listed ETFs would not be able to be claimed for, So EAFE fund pays withholding taxes on dividends received to the source countries. Are there perhaps some tax considerations (foreign tax credits?)
Its tiny 9bp fee makes it one of the cheapest in Australia. Discussed below). New comments cannot be posted and votes cannot be cast, More posts from the fiaustralia community. Maybe one to watch. *Calculated as the weighted average turnover of the underlying ETFs. IWLD only just reduced their fees a couple of weeks ago. By using our Services or clicking I agree, you agree to our use of cookies. Most ETF providers are sure to tuck this cash away in futures when certain thresholds are hit.
Can anyone explain the differences between VGS and IWLD for me? Hey everyone, I've been a silent observer of this forum and recently pulled the trigger and purchased my first ETFs with the goal of reaching Financial Independence within 7 years (my current savings rate is just under 70%). Investors could not really go wrong with either of them. MER is 0.09% vs 0.18%, which realistically goes up by 0.02% to account for the loss in franking credits for the 2.5% Aussie exposure in that ETF. Vanguard struggles to replicate US ETF success in Europe. The local share market is dominated by a few big banks, miners, and retailers. There are potential complications of IWLD’s FoF approach. However, from what we can tell, there have been no block trades on IWLD yet. However on a total return basis – which includes dividends – VGS has been the better performer over the past three years. How IWLD's creation baskets are optimised for tracking (wonkish, feel free to skip). New comments cannot be posted and votes cannot be cast. It is built as a fund of funds (FoF), meaning it buys other iShares ETFs – all of which are domiciled in North America – and does not directly hold any shares. However, there is more to it. US tax residents would be able to claim for these taxes paid. And which is better?
Is there a catch? How discount brokers actually work, ETF Insight: The rat race to become Europe’s number two ETF provider. There are two subtle differences between the two though. This means that block trade spreads are determined by the accessibility of the underlying securities, including the availability of hedges. Welcome to the concept of Financial Independence.
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