Investing in the S&P 500? Why CSPX is the Preferred Choice for Singaporean Investors


As a Singaporean investor looking to invest in the US stock market, choosing the right S&P 500 ETF can be a challenging decision given the large array of choices.

Among the many S&P 500 ETFs available, I find the iShares Core S&P 500 UCITS ETF (CSPX) stands out as an excellent option for Singaporean investors.

No Estate Duty Tax

One of the most significant advantages of investing in CSPX is that it is not subject to estate duty tax. This is because it is domiciled in Ireland, which does not have an estate duty tax. In contrast, US-domiciled ETFs like the SPDR S&P 500 ETF (SPY) are subject to estate duty tax, which can be as high as 40%, for holdings in excess of US$60,000.

Lower Dividend Withholding Tax (DWT)

Another advantage of CSPX for Singaporean investors is the lower dividend withholding tax (DWT) rate compared to other S&P 500 ETFs. Dividend withholding tax is a tax levied on dividends paid by US companies to non-US investors. CSPX has lower DWT because Ireland has a tax treaty with the United States that reduces the DWT rate of the ETF to just 15%. This is significantly lower than the 30% DWT rate for other S&P 500 ETFs that are domiciled in the US.

Competitive Expense Ratio

While the expense ratio of CSPX at 0.07% may not be lowest among its competitors, it's important to also take into account the more effective tax treatment that CSPX offers due to its domicile in Ireland. This can make CSPX a more cost-effective option overall, especially for long-term investors.

Accumulating Dividend

CSPX also has an accumulating dividend distribution policy, which means that it reinvests any dividends received back into the fund rather than distributing them to investors. This has the advantage of allowing investors, especially those in the accumulation phrase of investment, to benefit from compounding without incurring additional costs. (Note: you are still subjected to 15% DWT even if the dividend is reinvested)

Final Thoughts

In summary, CSPX is a strong choice for Singaporean investors looking to invest in the S&P 500. Its lower DWT, no estate duty tax, and accumulating dividend distribution policy make it a compelling option for investors looking to minimise costs.


The content shared in this post is just my opinion and should not be taken as financial advice. In fact, you should never treat what a random dude shared online as financial advice, no matter how credible he/she may sound.

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