Options for Equity Portfolio

Sarenco said:
Well Vanguard disagrees with you - they switched from MSCI to FTSE as their index provider for a large number of their passive funds years ago.
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Right and what business is Vanguard in? Do you think they switched because it was to your advantage or to theirs??? Remember retros ;-)
 
Marc said:
Whereas a global ETF portfolio will track the index more closely by definition.
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When you start digging into these type of funds you find they tend to contain a lot of synthetics, which is not surprising given what they are trying to replicate. As a result their ability to track the index is dependent on how well the synthetics reflect reality. So no their ability to track the index they are benchmarking is no greater than any other fund in tracking it’s benchmark. Just marketing horse s*@t.
 
spanners said:
For the rest of the professional benefits I might as well stick with the investment manager I have now, rather than engaging somebody else.

I suppose that's what I am struggling to decide. Do I leave him or not.
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spanners I'm not sure what question you are asking. If it is should you change investment managers, the only information you give are the charges. If you are asking should you go DIY then you have given the answer, namely that you don't really need an investment manager.
 
Marc said:
Now the ETF portfolio also has structural tax advantages relative to the UCITS fund which can be used as a benchmark and which on average add around 1%pa for an Irish resident investor.
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An investor doesn't need an adviser to access US-domiciled ETFs - there are US discount brokers that accept non-resident clients.

We ran the figures a few years ago on the likely impact of exit tax/deemed disposal versus income tax/CGT using reasonable assumptions and the difference in the end result was minimal. I would love to see how you arrived at your 1% figure.
 
Jim2007 said:
Right and what business is Vanguard in? Do you think they switched because it was to your advantage or to theirs??? Remember retros ;-)
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The main reason Vanguard switched index provider was because they were able to negotiate lower licence fees and these savings were passed to investors. Index providers don't receive retros - they get paid a straight licence fee.

The $1+ trillion Norwegian sovereign wealth fund also uses a FTSE index (FTSE Global All Cap) to benchmark its performance.

There is practically no difference in the net total return of the MSCI ACWI All Cap and the FTSE Global All Cap.
 
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Marc said:
Our analysis indicates a cumulative advantage all things considered ranging from 0.73% to 1.05%pa depending on the income tax status of the investor.
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Would you be willing to share that analysis with us? I would be very interested to see what assumptions you have used.
 
Sarenco said:
We ran the figures a few years ago on the likely impact of exit tax/deemed disposal versus income tax/CGT using reasonable assumptions and the difference in the end result was minimal.
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Hi Sarenco, do you have a link for these figures, would love to see how that works out?
 
Thanks, I think that confirms the quick calculations I did that because I am on 20% income tax, the 41% exit tax is significant.

Another thing relating to my circumstances is there is a reasonable chance that I'll be living in another EU country by the time the 8 years rolls round - there ETF's are taxed like other investments eg income + CGT.

Any idea how that work out - i.e if I bought EU domiciled ETFs now whilst living in Ireland, if I am not living in Ireland in 8 years time can I just ignore the deemed disposal rule.?
 
Marc said:
Whereas an investor holding US ETFs receives an automatic 15% tax credit to offset against their Irish income tax.
So even a self employed tax payer earning €300k pa only has to pay an additional 40%.
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So an effective tax rate for that taxpayer of 49.85% on US income received from a UCITS, versus 55% from a U.S. ETF. Is that your point?
 
Surely you are comparing 49.85% with 20%, plus USC and PRSI as relevant. No?

In any event, I certainly agree that any projection is highly sensitive to the assumptions used (which is why I asked if you were willing to share your analysis with us).
 
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