A good long term portfolio w/ good expense rations

[ExpatJ]

Annuities are not recommended due to their high sales commission (which the buyer is not usually aware of) and high overhead fees.

Interesting article covering the increasing popularity of annuities with US pensioners:

http://www.morningstar.co.uk/uk/news/132136/us-pensioners-opt-for-income-security-as-uk-scraps-annuities.aspx

only a totally financial ignorant would buy an annuity during the present extremely low interest rate period.

Only someone divorced from reality would dismiss annuities out of hand ;-)

[Naam]

Annuities are not recommended due to their high sales commission (which the buyer is not usually aware of) and high overhead fees.

Interesting article covering the increasing popularity of annuities with US pensioners:

http://www.morningstar.co.uk/uk/news/132136/us-pensioners-opt-for-income-security-as-uk-scraps-annuities.aspx

only a totally financial ignorant would buy an annuity during the present extremely low interest rate period.

Only someone divorced from reality would dismiss annuities out of hand ;-)

to each his own.

[fletchsmile]

Article today from Morningstar, may be of interest to those picking funds based out of US

http://news.morningstar.com/articlenet/article.aspx?id=677629

Cheers

Fletch

[AnotherOneAmerican]

only a totally financial ignorant would buy an annuity during the present extremely low interest rate period.

Really? Current UK annuity rates are 4.75% at age 55, rising to 7.95% at age 75 (level payment, no guarantee, single life). With an impaired life the rates are a bit higher. That doesn't seem too bad to me for someone who wants a secure, reliable income and doesn't want to leave the money to someone else.

At age 55 and 4.75%, you need to live 21 years to break even, with no interest in that 21 years.

Seems like a bad bet to me. After 10 years the income will be worthless due to inflation.

At age 75 and 7.95%, you need to live 13 years to break even, with no interest in that 13 years.

Seems like another bad bet to me. At least the inflation won't kill you.

Not to mention taxed!

Reality is, not many need an annuity after age 80 .........

I looked carefully at annuities, worthless scams IMHO, better to spend the money now.

(unless you think you might be killed for your money)

Edited December 19, 2014 by AnotherOneAmerican

[fletchsmile]

only a totally financial ignorant would buy an annuity during the present extremely low interest rate period.

Really? Current UK annuity rates are 4.75% at age 55, rising to 7.95% at age 75 (level payment, no guarantee, single life). With an impaired life the rates are a bit higher. That doesn't seem too bad to me for someone who wants a secure, reliable income and doesn't want to leave the money to someone else.

Those annuity rates are great! If someone can afford it i highly recommend buying as a portion of a pension .

4.75% and they're paying part of it out of your own capital - yuk!

Annuities can have their place in specific circumstances. When buying one check for open market options not tied to whoever you've been saving with, eg buy thur brokers like Hargreaves Lansdown if UK.

On those rates though, most people aged 55 would be better putting their money safely in cash for a couple of years, drawing a little out of capital. Then if they really insist on an annuity, buy it a couple of years or so from now. Should get at least 25bp better some point next year, and more again the year after as rates slowly buy surely rise

Buying now guarantees you lock in at virtually the lowest point in the interest rate cycle. Why would anyone do that? They're not going much lower from here, and next year even Ms Yellen is taking about increasing rates

Cheers

Fletch

Edited December 19, 2014 by fletchsmile

[rgs2001uk]

Annuities are not recommended due to their high sales commission (which the buyer is not usually aware of) and high overhead fees.

I don't know about the American market, but in the UK there is 0% sales commission on annuity purchase. In fact, it's prohibited by law. In the past, when it was permitted, it was typically 1-1.5% of the annuity value. Not exorbitant.

Knowledgeable investors have other, better options.

I'd love to know what. I can't at the moment think of any other investment that will guarantee a steady, inflation linked income for life.

For risk-averse pensioners an annuity for all, or part, of their pension can be an excellent investment.

If you are American, I recommend keeping your holdings with an American brokerage

And if you are American I recommend renouncing your American citizenship. It's fairly pricey to do initially, but the long term advantages of being able to live tax free more than make up for it.

Personally I, quite legally, pay zero income tax and zero capital gains tax by holding all my taxable investments offshore or in a UK tax-privileged account (ISA).

I'd love to know what. I can't at the moment think of any other investment that will guarantee a steady, inflation linked income for life.

My UK properties are doing just that, and have done for the last 15 years.

[Naam]

only a totally financial ignorant would buy an annuity during the present extremely low interest rate period.

Really? Current UK annuity rates are 4.75% at age 55, rising to 7.95% at age 75 (level payment, no guarantee, single life). With an impaired life the rates are a bit higher. That doesn't seem too bad to me for someone who wants a secure, reliable income and doesn't want to leave the money to someone else.

i just realised that we are talking different annuities. i was referring to "simple" annuities which work like a "reverse mortgage" and do not take age/life expectancy into consideration, i.e. in case of the beneficiary's demise the remainder of the capital is paid to his/her heirs. i confess i had no idea that an "anglo" version exists which is totally different.

[ExpatJ]

Annuities are not recommended due to their high sales commission (which the buyer is not usually aware of) and high overhead fees.

I don't know about the American market, but in the UK there is 0% sales commission on annuity purchase. In fact, it's prohibited by law. In the past, when it was permitted, it was typically 1-1.5% of the annuity value. Not exorbitant.

Knowledgeable investors have other, better options.

I'd love to know what. I can't at the moment think of any other investment that will guarantee a steady, inflation linked income for life.

For risk-averse pensioners an annuity for all, or part, of their pension can be an excellent investment.

If you are American, I recommend keeping your holdings with an American brokerage

And if you are American I recommend renouncing your American citizenship. It's fairly pricey to do initially, but the long term advantages of being able to live tax free more than make up for it.

Personally I, quite legally, pay zero income tax and zero capital gains tax by holding all my taxable investments offshore or in a UK tax-privileged account (ISA).

I'd love to know what. I can't at the moment think of any other investment that will guarantee a steady, inflation linked income for life.

My UK properties are doing just that, and have done for the last 15 years.

But managing properties is more work and the rental income is not guaranteed. It's all about peace of mind not maximising profit which I think is the key point being missed.

[ExpatJ]

Following on from my initial post- this morning i bought the following ETFs to keep and hold over the next 10-15 years or so (i was surprised to find that they all have good annual dividends also!)

Emerging Market Govt Bonds (PCY)- fee 0.4%, Dividend 4.5%

US corporate bonds (LWC) fee 0.15%, Div: 4.2%

Ex USE real estate (VNQI) fee: 0.2%, Div: 4%

US REIT (SCHH) fee: 0.07%, Div: 2%

Emerging mkt equities (SCHE) fee: 0.1%, div: 2.8%

Frontier equities (FM) fee: 0.8% , Div: 3.2%

US consumer staples (VDC) fee: 0.1% Div: 2%

US small cap (IJR) fee: 0.1% Div 1.2%

S+P ETf (VOO) fee: 0.05% Div 1.8%

UK FTSE index (EWU) fee 0.5%, Div 7.5%

I also bought TESCO UK shares, the only way is up!

[AyG]

Following on from my initial post- this morning i bought the following ETFs to keep and hold over the next 10-15 years or so (i was surprised to find that they all have good annual dividends also!)

UK FTSE index (EWU) fee 0.5%, Div 7.5%

If you look at the dividend history, you'll see there was an unnaturally large dividend ($1.019) in June last year. (I don't know why.) This is skewing the figures that you're seeing. This is about 4 times the normal June dividend.

[ExpatJ]

Following on from my initial post- this morning i bought the following ETFs to keep and hold over the next 10-15 years or so (i was surprised to find that they all have good annual dividends also!)

UK FTSE index (EWU) fee 0.5%, Div 7.5%

If you look at the dividend history, you'll see there was an unnaturally large dividend ($1.019) in June last year. (I don't know why.) This is skewing the figures that you're seeing. This is about 4 times the normal June dividend.

Well spotted!

Im hopeful about the Tesco shares- dropped by 45% in recent months.

[Ludacris]

You've definitely put a lot of thought into your portfolio and it looks good.

Out of curiosity, I'm wondering why you chose SCHH as your domestic REIT? A 2% dividend for a REIT is quite low.

Even VNQ offers over 3.5%, and has also outperformed over the past 3-years with very similar holdings with only an extra 0.03% expense ratio.

http://etfdb.com/tool/etf-comparison/SCHH-VNQ/performance/

Lots of other REITs have higher dividends but with higher risk of course which you may or may not be interested in.

[ExpatJ]

You've definitely put a lot of thought into your portfolio and it looks good.

Out of curiosity, I'm wondering why you chose SCHH as your domestic REIT? A 2% dividend for a REIT is quite low.

Even VNQ offers over 3.5%, and has also outperformed over the past 3-years with very similar holdings with only an extra 0.03% expense ratio.

http://etfdb.com/tool/etf-comparison/SCHH-VNQ/performance/

Lots of other REITs have higher dividends but with higher risk of course which you may or may not be interested in.

Good point. I will look at more risky/profitable riets - good thing about etrade is that it only costs 9$ per trade so cheap and easy to shift between funds.

Actually when I as planning this I had assumed that there were very few dividend paying etfs and assumed that I wouldn't get any- so it's been a pleasant surprise to see that I can expect around 500$ per month in dividends from the above funds (which I will reinvest)

[watcharacters]

.

Good idea to do more performance checks perhaps.

Look at commodities recently and in particular oil.

Who would have guessed oil, which was thought to only have an upward future, could fall so hard?

[fletchsmile]

You've definitely put a lot of thought into your portfolio and it looks good.

Out of curiosity, I'm wondering why you chose SCHH as your domestic REIT? A 2% dividend for a REIT is quite low.

Even VNQ offers over 3.5%, and has also outperformed over the past 3-years with very similar holdings with only an extra 0.03% expense ratio.

http://etfdb.com/tool/etf-comparison/SCHH-VNQ/performance/

Lots of other REITs have higher dividends but with higher risk of course which you may or may not be interested in.

Good point. I will look at more risky/profitable riets - good thing about etrade is that it only costs 9$ per trade so cheap and easy to shift between funds.

Actually when I as planning this I had assumed that there were very few dividend paying etfs and assumed that I wouldn't get any- so it's been a pleasant surprise to see that I can expect around 500$ per month in dividends from the above funds (which I will reinvest)

Think very carefully again about tax.

Ludacris refers to this as a domestic REIT. Think you mentioned you're a Brit. In which case it is not domestic but foreign. What's suitable for him is not necessarily the same for you when you consider tax.

You're also still likely hit with the 15% US WHT even with a W8BEN in place

Think also about the tax you are giving away in one form or another and losing because you've chosen a US REIT compared to other country. eg Singapore REIT is more tax efficient and in a currency better correlated to THB.

Depending on your own individual circumstances with two funds with total return the same: a lower dividend with higher capital gain may also be preferable to a higher dividend with lower capital gain, particularly with the 15% lost WHT angle.

Worth googling around and understanding your tax better.

Cheers

Fletch

Edited January 1, 2015 by fletchsmile

[Ludacris]

No worries.

The website I mentioned above is one of my favorite sites and also has etf's listed by category, which includes REITs.

http://etfdb.com/etfdb-categories/

Here's the list of REITs sorted by dividend yield:

http://etfdb.com/etfdb-category/real-estate/?q=dividend_yield+desc#dividends

Just remember the high dividend that comes with mortgage REITs also comes with high risk.

This next link will take a long time to go through but it's definitely worth it. There's detailed descriptions of every class of dividend etf including REITs, and it goes through the pro's and con's of each one complete with graphs of dividend yield vs. risk.

http://etfdb.com/2012/101-high-yielding-etfs-for-every-dividend-investor/

Good times!

Edit: Of course like Fletch said taxes are an important consideration as well.

Edited January 1, 2015 by Ludacris

[ExpatJ]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

[ExpatJ]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

And you have to admire the canny americans- no tax on capital gains for foreigners investing in their stock market- perfect way to encourage foreign money into your country.

[AyG]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

And you have to admire the canny americans- no tax on capital gains for foreigners investing in their stock market- perfect way to encourage foreign money into your country.

Admire? Really? 15-30% withholding tax for non-residents on income is hardly attractive. That's why I only have a single ETF holding in the US - everything else I've been able to find more tax efficiently elsewhere.

And as for capital gains tax, can you think of any country which does impose it on non-residents? Offhand I can't. Not UK, Luxembourg, Singapore, Hong Kong, Isle of Man, Malaysia, New Zealand, Thailand. (Those are just jurisdictions I've had reason to look into in the past.)

[AyG]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

Please tell me you're not British (as Fletchsmile suggests). If you are (and in fact if you're anything other than an American of the USA variety) it appears you might've made some very bad decisions from a tax perspective.

[ExpatJ]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

Please tell me you're not British (as Fletchsmile suggests). If you are (and in fact if you're anything other than an American of the USA variety) it appears you might've made some very bad decisions from a tax perspective.

I'm touched by your concern

the tax on dividends in UK is potentially even higher, no?

[ExpatJ]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

And you have to admire the canny americans- no tax on capital gains for foreigners investing in their stock market- perfect way to encourage foreign money into your country.

Admire? Really? 15-30% withholding tax for non-residents on income is hardly attractive. That's why I only have a single ETF holding in the US - everything else I've been able to find more tax efficiently elsewhere.

And as for capital gains tax, can you think of any country which does impose it on non-residents? Offhand I can't. Not UK, Luxembourg, Singapore, Hong Kong, Isle of Man, Malaysia, New Zealand, Thailand. (Those are just jurisdictions I've had reason to look into in the past.)

Fair point.

But I can find you dozens of more tax efficient options outside of USA. Not sure they will actually make you money over 10 year period

But yes I get the point you are making.

[fletchsmile]

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

Please tell me you're not British (as Fletchsmile suggests). If you are (and in fact if you're anything other than an American of the USA variety) it appears you might've made some very bad decisions from a tax perspective.

Spot on.

That's also the problem I see time and again when Americans recommend investments to other nationalities. Unfortunately they don't realise the rest of the world isn't the same as the US.

There's good reason why US investments have disclaimers that they are only for US citizens and good reasons why other countries have disclaimers that the product excludes people in the US.

Cheers

Fletch:)

[ExpatJ]

We

Regarding taxes. Yes tax free capital gains are my priority given the long time horizon. A tax on dividends is fine especially given I wasn't expecting any dividend payments at all when starting out on this investment project.

Please tell me you're not British (as Fletchsmile suggests). If you are (and in fact if you're anything other than an American of the USA variety) it appears you might've made some very bad decisions from a tax perspective.

Spot on.

That's also the problem I see time and again when Americans recommend investments to other nationalities. Unfortunately they don't realise the rest of the world isn't the same as the US.

There's good reason why US investments have disclaimers that they are only for US citizens and good reasons why other countries have disclaimers that the product excludes people in the US.

Cheers

Fletch:)

Even if one did pay taxes in UK, I understand that dividend taxes are even higher for high income groups in UK than they are in USA? Plus one would have to pay capital gains tax. So surely in that case just paying lower dividend and no cap gains tax is better? And stocks in USA would be considered income earned abroad and therefore not taxed in UK? Edited January 1, 2015 by ExpatJ

[fletchsmile]

So if you dont pay capital gains tax why are you looking for US funds that take 15% WHT on dividends?

You seemed to think above dividends are an on top bonus. That's not the case. If the investment pays zero div and you pay zero capital gains......

Has the penny dropped yet

[ExpatJ]

So if you dont pay capital gains tax why are you looking for US funds that take 15% WHT on dividends?

You seemed to think above dividends are an on top bonus. That's not the case. If the investment pays zero div and you pay zero capital gains......

Has the penny dropped yet

If the stock pays zero dividends but increases in value by say 100$ (so capital gain is 100$) . When I sell the stock I get 100 $ profit because no tax on that cap gain.

Is that right?

Edited January 1, 2015 by ExpatJ

[fletchsmile]

So if you dont pay capital gains tax why are you looking for US funds that take 15% WHT on dividends?

You seemed to think above dividends are an on top bonus. That's not the case. If the investment pays zero div and you pay zero capital gains......

Has the penny dropped yet

If the stock pays zero dividends but increases in value by say 100$ (so capital gain is 100$) . When I sell the stock I get 100 $ profit because no tax on that cap gain.

Is that right?

Yes excluding tax implications you do.

Now 2 questions as you're on the right track:

1) have you considered whether you bought a US fund with reporting status or not, and whether if you had bought the right version/status the capital gains might have been higher than $100 in the first place?

This would not be something American investors that told you you've got a great portfolio by buying "lowest cost fee no load mutual funds" would have considered for you as a non-American, as they are not affected in the same way

2) You mentioned above some of your US domiciled funds pay say 4% div. Yet seem to think this is a good thing? So let's say it pays a div before you take the CG. Instead of a 100% CG you would have 96% CG and 4% income. Dividends are not on top extras simply another form of distributing total returns. These have WHT of 30% without a W8BEN in place for non-Us residents and 15% with a W8BEN in place for a Brit or Thai resident (different rate again for other residents)

So let's assume you know what you're doing and did your homework and the admin and have a W8BEN in place (best case scenario):

The 4% div paid would mean that you receive 4% income with 15% tax deducted and capital gain of 96%. So you now receive 3.4% as a div and 96% as CG.

You've potentially just cost yourself 4% x 15% = 0.6% in tax, unless you've bought through the right tax vehicle in the UK

So congratulations on picking the lowest cost TER fund of 0.X%, but your real after cost tax is 0.X%+ 0.6%.

How would you have faired picking a slightly higher TER fund which is more tax efficient?

This is where we came in when I added on post #3, #12, etc.

Sorry to say it sounds like you're sold on US style marketing to US residents, which revolves around lowest cost TER. Hence while it may look OK to a US national such as Ludicras, as a Brit AyG's comments are well worth noting and something to read up on

Cheers

Fletch

Edited January 1, 2015 by fletchsmile

[ExpatJ]

So if you dont pay capital gains tax why are you looking for US funds that take 15% WHT on dividends?

You seemed to think above dividends are an on top bonus. That's not the case. If the investment pays zero div and you pay zero capital gains......

Has the penny dropped yet

If the stock pays zero dividends but increases in value by say 100$ (so capital gain is 100$) . When I sell the stock I get 100 $ profit because no tax on that cap gain.

Is that right?

Yes excluding tax implications you do.

Now 2 questions as you're on the right track:

1) have you considered whether you bought a US fund with reporting status or not, and whether if you had bought the right version the capital gains might have been higher than $100 in the first place

This would not be something American investors that told you you've got a great portfolio by buying "lowest cost fee no load mutual funds" would have considered for you as a non-American, as they are not affected in the same way

2) You mentioned above some of your US domiciled funds pay say 4% div. So let's say it pays a div before you tax the CG. Instead of a 100% CG you would have 96% CG and 4% income. Dividends are not on top extras simply another form of distributing total returns. These have WHT of 30% without a W8BEN in place for non-Us residents and 15% with a W8BEN in place for a Brit or Thai resident (different rate again for other residents)

So let's assume you know what you're doing and did your homework and the admin and have a W8BEN in place (best case scenario):

The 4% div paid would mean that you receive 4% income with 15% tax deducted and capital gain of 96%. So you now receive 3.4% as a div and 96% as CG.

You've potentially just cost yourself 4% x 15% = 0.6% in tax.

So congratulations on picking the lowest cost TER fund of 0.X%, but how would you have faired picking a slightly higher TER fund which is more tax efficient.

This is where we came in when I added on post #3, #12, etc.

Sorry to say it sounds like you're sold on US style marketing to US residents, which revolves around lowest cost TER. Hence while it may look OK to a US national such as Ludicras, as a Brit AyG's comments are well worth noting and something to read up on

Cheers

Fletch

Phew, you had me worried in your last earlier post as I thought I must have completely misunderstood something. But as I said, those capital gains are tax free.

[ExpatJ]

So if you dont pay capital gains tax why are you looking for US funds that take 15% WHT on dividends?

You seemed to think above dividends are an on top bonus. That's not the case. If the investment pays zero div and you pay zero capital gains......

Has the penny dropped yet

If the stock pays zero dividends but increases in value by say 100$ (so capital gain is 100$) . When I sell the stock I get 100 $ profit because no tax on that cap gain.

Is that right?

Yes excluding tax implications you do.

Now 2 questions as you're on the right track:

1) have you considered whether you bought a US fund with reporting status or not, and whether if you had bought the right version the capital gains might have been higher than $100 in the first place

This would not be something American investors that told you you've got a great portfolio by buying "lowest cost fee no load mutual funds" would have considered for you as a non-American, as they are not affected in the same way

2) You mentioned above some of your US domiciled funds pay say 4% div. So let's say it pays a div before you tax the CG. Instead of a 100% CG you would have 96% CG and 4% income. Dividends are not on top extras simply another form of distributing total returns. These have WHT of 30% without a W8BEN in place for non-Us residents and 15% with a W8BEN in place for a Brit or Thai resident (different rate again for other residents)

So let's assume you know what you're doing and did your homework and the admin and have a W8BEN in place (best case scenario):

The 4% div paid would mean that you receive 4% income with 15% tax deducted and capital gain of 96%. So you now receive 3.4% as a div and 96% as CG.

You've potentially just cost yourself 4% x 15% = 0.6% in tax.

So congratulations on picking the lowest cost TER fund of 0.X%, but how would you have faired picking a slightly higher TER fund which is more tax efficient.

This is where we came in when I added on post #3, #12, etc.

Sorry to say it sounds like you're sold on US style marketing to US residents, which revolves around lowest cost TER. Hence while it may look OK to a US national such as Ludicras, as a Brit AyG's comments are well worth noting and something to read up on

Cheers

Fletch

Phew, you had me worried in your last earlier post as I thought I must have completely misunderstood something. But as I said, those capital gains are tax free.

q

Forgot to say, thanks for posting on this. It's very useful to confirm or clarify these investment issues.

[fletchsmile]

So if you dont pay capital gains tax why are you looking for US funds that take 15% WHT on dividends?

You seemed to think above dividends are an on top bonus. That's not the case. If the investment pays zero div and you pay zero capital gains......

Has the penny dropped yet

If the stock pays zero dividends but increases in value by say 100$ (so capital gain is 100$) . When I sell the stock I get 100 $ profit because no tax on that cap gain.

Is that right?

Yes excluding tax implications you do.

Now 2 questions as you're on the right track:

1) have you considered whether you bought a US fund with reporting status or not, and whether if you had bought the right version the capital gains might have been higher than $100 in the first place

This would not be something American investors that told you you've got a great portfolio by buying "lowest cost fee no load mutual funds" would have considered for you as a non-American, as they are not affected in the same way

2) You mentioned above some of your US domiciled funds pay say 4% div. So let's say it pays a div before you tax the CG. Instead of a 100% CG you would have 96% CG and 4% income. Dividends are not on top extras simply another form of distributing total returns. These have WHT of 30% without a W8BEN in place for non-Us residents and 15% with a W8BEN in place for a Brit or Thai resident (different rate again for other residents)

So let's assume you know what you're doing and did your homework and the admin and have a W8BEN in place (best case scenario):

The 4% div paid would mean that you receive 4% income with 15% tax deducted and capital gain of 96%. So you now receive 3.4% as a div and 96% as CG.

You've potentially just cost yourself 4% x 15% = 0.6% in tax.

So congratulations on picking the lowest cost TER fund of 0.X%, but how would you have faired picking a slightly higher TER fund which is more tax efficient.

This is where we came in when I added on post #3, #12, etc.

Sorry to say it sounds like you're sold on US style marketing to US residents, which revolves around lowest cost TER. Hence while it may look OK to a US national such as Ludicras, as a Brit AyG's comments are well worth noting and something to read up on

Cheers

Fletch

Phew, you had me worried in your last earlier post as I thought I must have completely misunderstood something. But as I said, those capital gains are tax free.

But with the US domiciled ETFs you're selecting, you're potentially voluntarily giving away 0.6% in tax charges which totally undermines your lowest cost ETF approach Edited January 1, 2015 by fletchsmile