Author Topic: Going all iShares  (Read 2488 times)

DaKini

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Going all iShares
« on: April 12, 2014, 01:33:04 PM »
Hi there, i currently mainly invest in iShares ETFs and i wonder if its a real problem to only invest with one or two big companys.
I understand thatbmy investments are not at ridks as they are shielded in case Blackrock goes bankrupt. A problem however would be that in such a case most of their etfs will be liquidatef, causing a hefty tax load.

What do you think of this (also for vanguard i think this may be a concern)?

danclarkie

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Re: Going all iShares
« Reply #1 on: April 13, 2014, 09:16:54 AM »
The thing is, for us Europeans, there are very few companies that offer good ETF's.
As you will know, the US Domiciled ETFs carry a 30% withholding tax on dividends, which sucks.

I am personally invested in iShares and UK Vangaurd.

I would estimate the chance of both of them liquidating in the next few years is low enough for me to not have to worry about it any time soon ;).

..Aber als Berliner ick werde sowas sorgenlos denken, wa? :P

Tyler

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Re: Going all iShares
« Reply #2 on: April 14, 2014, 10:51:25 PM »
I personally have diversified ETF companies for pretty much the reason you specify -- I don't like having more than half of my money controlled by any single company, no matter how trustworthy I think they are.  Finding good alternatives for popular ETFs through Vanguard/StateStreet(SPDR)/Schwab/etc. is pretty easy for a US investor.  And don't forget to look at index mutual funds, as that opens up even more options at places like Fidelity.
« Last Edit: April 14, 2014, 10:53:43 PM by Tyler »

danclarkie

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Re: Going all iShares
« Reply #3 on: April 15, 2014, 05:33:17 AM »
is pretty easy for a US investor.

Bingo.

Indigo

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Re: Going all iShares
« Reply #4 on: April 15, 2014, 10:43:28 AM »
As you will know, the US Domiciled ETFs carry a 30% withholding tax on dividends, which sucks.

I think this varies from country to country, it should depend on the double-taxation agreement between your country and the US.

For me (Czech Republic), the tax on dividends should be just 15%. But I guess I'll find out once me first dividends arrive and I file the tax.

danclarkie

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Re: Going all iShares
« Reply #5 on: April 16, 2014, 12:31:01 AM »
As you will know, the US Domiciled ETFs carry a 30% withholding tax on dividends, which sucks.
I think this varies from country to country, it should depend on the double-taxation agreement between your country and the US.

True, with my country of residence there is no agreement so it is 30%.
But the problem with US domiciled funds is that this tax will be applied to the fund dividends AFAIK.

So a Fund that is US domiciled, but tracks EU stocks, would pay 30% withholding tax on the dividends from that fund even though the dividends were paid by EU companies and would not be taxed had you been in them directly.