The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Fantasticmrfox on February 16, 2018, 10:57:39 PM
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Greetings most esteemed Mustachians.
I have been researching (perhaps poorly) for the past 6 months on how to invest in the Vanguard S&P 500 as a South African. Only one broker I have found allows me to invest in the S&P but their fees are almost as brutal as an actively managed fund.
I currently live in the UAE, if that helps at all, so could invest from here if anyone knows how. I've asked my bank but they don't provide the S&P option.
Does anyone have any solid means of investing in Vanguard stocks or something close to this from abroad (specifically SA or UAE)?
Your help is humbly appreciated.
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Generally I think most US companies will not allow overseas address have account and invest (there are legal reasons they are not allowed to do this). Generally restrictions on mutual funds. Vanguard I think is pretty difficult to be overseas and invest. Schwab has international accounts and people often talk about the company Interactive Brokers.
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Thanks, Nate79. I really appreciate that. I have contacted both of those companies and will see what they say.
If anyone has any advice on what else to invest in, as a non-American if the S&P500 is not an option, I'd really appreciate the help.
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I highly suggest you join your local Common Sense Personal Finance and Investing - The UAE Bogleheads® Chapter on Facebook.
https://www.facebook.com/groups/SimplyFI/?ref=bookmarks
In a nutshell: Yes you can. One way is to open an account with Interactive Brokers (who allow overseas addresses), or Saxo Bank (Danish but have an office in Dubai International Financial Center), or Internaxx (Luxembourg). All have pros and cons but all are viable options. I personally use Interactive Brokers as they are the cheapest (about 1$ per trade) but they are based in the US so you may have to deal with Estate taxes one day down the road. (well not you but your heirs)
Anyway, come join the group I suggested and ask specific UAE questions there!
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Awesome! Thank you Kalergie!
I've contacted Interactive Brokers and will look into their options asap. I'll inquire about the estate taxes as well.
Much appreciated. I'll join the group as well.
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Interactive Brokers won't give you any advise with regards to taxes (let alone international). All they can tell you is that they do or don't want to do business with you. They will! But they will make you sign a W-8BEN form. It's to proof to the IRS that you are not a US citizen/resident and what rate of withholding tax they should withhold should you own US domiciled equities.
There's also a really good book which may give you a good basic knowledge of expat investing.
Millionaire Expat - How to build wealth living overseas by Andrew Hallam. People in the Boglehead group UAE highly recommend it.
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Great, thanks again Kalergie. I'll compare the fees between that and an Allan Gray Unit Trust ETF in S.A.
I'll look into the taxes and external fees as well.
The book sounds good. I'll pick it up. I'm hoping property is mentioned in there as well as that's my third investment path. I've applied to the Boglehead community.
You've been a lot of help!
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Great, thanks again Kalergie. I'll compare the fees between that and an Allan Gray Unit Trust ETF in S.A.
Happy to help. I also just went to this Allan Gray's website and quickly! checked the fund fees. Ouch! 1.5 to 1.8% expense ratio. That's very high compared to an ETF from Vanguard. For example, the All-World Equity fund from Vanguard (VWRD) which is available to you through the London stock exchange has an expense ratio of 0.25%. Plus, Vanguard does not lock you in forever. No exit fees no annual fees or what ever. If you need to sell, you go ahead and sell and take your cash. That might not be the case with this Allan Gray. But yeah, very quick research from my side. Please take your time!
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I also live in the UAE. I opened an account with IB and I think it is the best option.
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Great, thanks again Kalergie. I'll compare the fees between that and an Allan Gray Unit Trust ETF in S.A.
Happy to help. I also just went to this Allan Gray's website and quickly! checked the fund fees. Ouch! 1.5 to 1.8% expense ratio. That's very high compared to an ETF from Vanguard. For example, the All-World Equity fund from Vanguard (VWRD) which is available to you through the London stock exchange has an expense ratio of 0.25%. Plus, Vanguard does not lock you in forever. No exit fees no annual fees or what ever. If you need to sell, you go ahead and sell and take your cash. That might not be the case with this Allan Gray. But yeah, very quick research from my side. Please take your time!
Really appreciate you doing that. From what I have read and researched it looks like Interactive Brokers is the better choice.