30% dividend withholding tax ... can 15% be reclaimed on US ETFs using W8-BEN as for stocks?
CORRECT!! Actually only 15% will be taken off at source not 30 once you have filled in that form. Actually I never even bothered filling in the form and my stockbroker only charges me 15%
When I started researching about ETF's which was approximately six months to a year ago the terms "good and bad" in reference to ETFs were not being used. So I know nothing about these terms.
ETF CURRENCY RISK.....
Say you invest in a U.S. WORLD FUND, I believe there is a Double currency risk.
A. Euros are converted to dollars to purchase the fund. You invest for 10 years and during that period the value of the Euro against the dollar strengthens. When you sell your portfolio after 10 years your profits would've been dampened by the increased value of the Euro. I personally am a believer that the dollar will continue to strengthen in the short to medium term but will collapse heavily within a few years.
B. If you buy this ETF, you will be exposed to currency risk within the ETF. I.e. The underlying companies within this ETF have their own individual currency risk. A company's currency exposure is not related to the country its headquarters are in but the currency it does its business in. However in reality if this is a world ETF I would imagine the currency risk would balance itself out.
When I invested I did not ignore currency risk and that is why I prioritised and more heavily weighted a Euro based ETF denominated in EUROS. Unfortunately it had to be a UCITS ETF. Because of my fear of the direction of the global stock markets six months ago I sold everything made a small loss and have now started investing small amounts into gold related assets. My original portfolio is currently down another 7% from when I sold.
QE has greatly devalued the major world currency's and the program will be ramped up shortly in Europe, Japan and I believe the US too when recession hits.
I personally believe equities have a long way further to fall based on global debt to GDP ratios.