Key Post Various questions on low cost index funds

Discussion in 'Exchange Traded Funds (ETFs)' started by KeyPoster, Nov 30, 2009.

  1. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Could any one suggest any Low Cost Index Funds for the EU + US for log tern investment.

    Hoping to set up a "Dollar Cost Averaging System" for an index?

    What steps would you recomend?
     
  2. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Buying an low cost index?

    1-How do I buy an very low cost index?

    2-Who is the best (i.e. cheapest)

    2-Are there pros/cons in buying a euro index as opposed to a US index (in terms of tax, or other associated costs)

    3- Do I have to declare any capital gains each year, even if I reinvest dividends?

    4-Any other tips in how to pursue this venture.

    Am hoping to invest for the long term (Buffet Style).
     
  3. Daytrader

    Daytrader Registered User

    Posts:
    28
    Re: Recommended Low Cost Index Fund - US + EU?

    there are a number of ETFs you could use.
    For tracking EU :
    • db x-trackers dj euro stoxx 50 (symbol is xesc). It is traded in london.
    • ishares dj euro stoxx 50 (symbol is EUE). Also traded in london
    For tracking the SP500
    • Ishares S&p500 (symbol IUSA). Traded in london
    • SPDR TRUST (symbol SPY) .Traded in NY
    If u pop some of these into google, you will get plenty of info to read on them..Maybe others could suggest some too
     
  4. PMU

    PMU Frequent Poster

    Posts:
    777
    Re: Recommended Low Cost Index Fund - US + EU?

    Because of brokers’ fees, ETFs are probably better for lump sum investments rather than cost averaging. You might be better off going with e.g. QL, where you can invest in Eurostoxx50 and S&P index tracking funds and can then cost average into them. [There are loads of posts on AAM on this.] This also has the benefit that dividends are re-invested automatically in the fund.
     
  5. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Re: Recommended Low Cost Index Fund - US + EU?

    I plan on tracking the S&P 500 using a very low cost index. With a share to bond ratio of 75% to 25%.

    In doing so is it possible for me to purchase both bonds and securities (shares) associated with this index? Or am I just confused, in that it is not possible to own both shares and bonds of the S&P 500?
     
  6. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Re: Recommended Low Cost Index Fund - US + EU?

    I am confused?

    There is alot of promotion of ETFs. Which are expensive for regular investments such as dollar cost averging. I am hoping to avoid ETF and still buy a low cost index? How can this be achieved?
     
  7. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    What are the tax implications for US v'rs EU indexes

    Are there any tax reasons that would encourage investment in the EU indexes as opposed to the EU indexes.
     
  8. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    -Is it possible to buy this particular index at low cost from Ireland?

    -I have read that Vanguard have restrictions on Irish Residents? Is this true?

    -What broker is the cheapest for this index

    -Where can I get a list of brokers that deal in this particular index?
     
  9. Rory Gillen

    Rory Gillen Frequent Poster

    Posts:
    248
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    Of course it is, many of Vanguard's ETFs are listed on the US markets and you can buy them there from any broker you use, Irish or otherwise. There are no restrictions in dealing in ETFs once they are listed on a recognised stock exchange, which Vanguard's are. Just look up the Vanguard site and pick the ETF of your choice and give the appropriate instructions to your broker. Online dealers are cheapest but it will take a week or so to get an account open. www.odlsecurities.com click alot of boxes for the Irish-based investor but TD Waterhouse seem to be doing alot of advertising here so they are probably good too.

    Rory
     
  10. Rory Gillen

    Rory Gillen Frequent Poster

    Posts:
    248
    Re: Recommended Low Cost Index Fund - US + EU?

    Index funds are available from several of the Irish insurance companies but are high cost. If you want low cost, you must do it yourself and buy an exchange traded fund via a stockbroker for whatever index you wish to buy. Going through an online stocker is cheapest on the execution side.

    Rory Gillen
     
  11. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    Thanks for that. Very Helpful.

    But Iam finding it very difficult to find info on how to invest in a low cost index as the middle men (brokers + investment companys) are very big into promoting products with high expense ratios?

    Essentially I want to buy low cost indexes such as S&P 500 + FTSE 100 at the cheapest possible price? Please help..?
     
  12. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Re: Recommended Low Cost Index Fund - US + EU?

    [FONT=&quot]Rory,

    thanks a mill for that advice. I have been trying to get the answer to this for months now.

    I want to invest regularly and over a very long peroid using dollar ost averging.

    Is it not true though ETFs "are generally not suitable for investors who wish to add money regularly, since most brokers will charge a separate commission on every new investment you make."[/FONT]
    [FONT=&quot]
    Where should i start in order to achieve a low cost index....Iam very consious of cost?[/FONT][FONT=&quot][/FONT]
     
  13. maturin

    maturin Frequent Poster

    Posts:
    56
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    Actually, I believe that VFINX is not an ETF but rather a mutual fund. Vanguard (as far as I know) don't offer these funds to retail investors in Ireland. For non-retail investors, I believe that they require a min investment of 100k+.

    Vanguard do offer ETFs such as VTI (total US market) which would be available through online brokerages, etc.

    This is not a recommendation for VTI. I am in no way associated with Vanguard.
     
  14. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Do I have to use a stock broker to buy an index?

    I want to use dollar cost averging to buy a number of indices (S&P500, FTSE + Eurostoxx 50). I want to invest about €600/month and maybe the odd lump sum when ever I have the cash. I want to ensure as low a expense ratio as possible.

    Do I have to use a stockbroker? Or can I avoid the middle man, even with such a small investment plan ?

    Are there complications in avoiding the broker such as scam artists and tax difficulties.....oh where to start???
     
  15. Robert Moy

    Robert Moy Guest

    Re: Do I have to use a stock broker to buy an index?

    The best way is to buy an Exchange-Traded Fund, which you will get directly from any of the banks that manufacture them e.g. Barclays or Soc Gen. Google Exchange Traded Funds and you should find what you want
     
  16. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Tax on mutual funds?

    If I own a number of mutual funds from different countries e.g S&P 500 tracker, ISEQ tracker and DAX tracker) when, how and how much tax do I pay?
     
  17. Rory Gillen

    Rory Gillen Frequent Poster

    Posts:
    248
    Re: Do I have to use a stock broker to buy an index?

    You can look up ODL Securities (www.odlsecurities.com) in London. They click alot of boxes for the Irish-based investor. They also do over the phone dealing aswell as online dealing. A range of ETFs bought into a stockbroking account is a decent solution if you want to track several indices, keep costs to a minimum, ease of execution and ensure good transparency. But Quinn Life's range of non-listed tracker funds is an option as highlighted above and they take regular payments through direct debit facilities, which stockbroking accounts do not. Personally, I find the service from life companies in Ireland a long way behind a simple stockbroking account. Hope that helps.

    Rory Gillen
     
  18. Rory Gillen

    Rory Gillen Frequent Poster

    Posts:
    248
    Re: How do I buy the Vanguard Index 500 Investor VFINX (total Stock Index)?

    Maturin is correct - just look up www.vaguard.com and heck out their list of ETFs - you will find something suitable there. You can buy it through your stockbroker when you have an account open and money lodged.

    Rory Gillen
     
  19. KeyPoster

    KeyPoster Registered User

    Posts:
    26
    Discount Broker -Reviews

    Has anyone used any of these discount brokers? Any comments

    Schwab,

    Fidelity,

    ScotTrade,

    tdAmeritrade,

    First Trade,

    Banc of America,
    Sogotrade,

    E*Trade,

    Trade King
     
  20. soy

    soy Frequent Poster

    Posts:
    701
    Re: Discount Broker -Reviews

    Use TD Ameritrade, find them easy to deal with and quite good. However think they stopped opening new accounts for Irish investors a few years back.

    Have you read the key posts, there is a lot of info there on the various online brokers