Compare the share classes, costs, listing currency and trading hours of Irish-domiciled ETFs.
Open your broker app, search for the Irish-domiciled fund you plan to switch to, and note how many versions of it come up and what currency each one trades in. You will probably find more than one, and the differences between them change what you pay.
Hakim, an invented learner, had been buying a US-listed fund every month. After lesson 5.2, "How Irish domicile changes the dividend tax", Hakim was ready to switch the monthly purchase to an Irish-domiciled fund. In the broker app the fund showed up four times: two versions with "Acc" in the name and two with "Dist", two trading in US dollars and two in British pounds. The bid and ask prices were further apart than on the US-listed fund, and the market seemed to be closed every time Hakim checked. A forum post Hakim had read left all of this out, and Hakim did not switch that week. These extra choices and costs are trade-offs to weigh. None of them is a reason to drop the switch, and each one belongs in your comparison.
Many Irish-domiciled funds come in two share classes. An accumulating share class keeps dividends inside the fund and reinvests them. The unit price rises by the dividend amount and you receive no cash. A distributing share class pays dividends out to you, usually a few times a year.
Withholding tax at fund level is the same for both classes. As lesson 5.2 explained, it is taken when the US companies pay the fund, and the classes differ only in what happens after that. With accumulating, there is nothing to convert or reinvest, so you pay no FX spread on small dividend payments and have no cash sitting idle. With distributing, you get cash to spend or reinvest yourself, which suits people who want income, but each payment may need converting and reinvesting, and that costs money. For a Singapore individual, neither class creates a Singapore tax bill, as lesson 3.3 explained.
Pick the class based on whether you want cash income or automatic reinvestment without FX or idle-cash costs. The course "Build and run an ETF portfolio", lesson 4.1, "Two ways a fund can handle its dividends", covers how to make this choice as part of a portfolio.
Many Irish-domiciled ETFs list on the London Stock Exchange. The same fund can trade in London on one line in US dollars and on another line in British pounds. Both lines are the same fund, and the line you choose sets the currency you pay in. If you already hold US dollars, the US dollar line avoids an extra conversion. Buying the pound line means converting Singapore dollars into pounds, and the conversion costs from module 2 then apply to that route. Check how your broker handles each currency before you pick a line.
London trades during the Singapore afternoon and evening, so the market will look closed if you check in the morning, as Hakim did. The exact hours shift when the UK changes its clocks, so check current trading hours on the exchange's own website. Many people in Singapore find London hours easier than New York's overnight session, which lesson 6.1 covers.
The total expense ratio (TER) is the yearly charge a fund takes for running itself, stated in the factsheet as a percentage. Irish-domiciled versions sometimes have a slightly higher TER than the US-domiciled twin, and sometimes the TER is the same. Note the TER for each fund from its factsheet.
TER alone does not tell the whole story. Tracking difference is how far a fund's return fell short of its index over a period, or occasionally beat it. It includes the TER plus everything else: trading costs, how dividends were taxed and handled, and any income from lending shares. The Irish fund's withholding advantage also shows up in it. Compare tracking difference over several years, using the fund's own reports or factsheet, and measure both funds against the same version of the index. The course "Build and run an ETF portfolio", lesson 3.2, "Tracking difference is what you actually lost to the index", sets out the method in more detail.
The bid-ask spread is the gap between the highest price a buyer offers and the lowest price a seller asks. You pay roughly half the spread each time you trade. The most heavily traded US-listed funds often have very tight spreads. An Irish-domiciled version can trade less and show a wider spread, especially on a less busy currency line, which is what Hakim saw.
The spread is a one-off cost on each trade, while TER and withholding are yearly costs. For someone who buys monthly and holds for decades, a slightly wider spread may matter less than a yearly saving. For someone who trades often, it may matter more. Spreads are often wider near the open and close and outside the busiest hours, so check the live bid and ask on your broker's order screen at the time of day you would actually trade.
Hakim wrote down, for the US dollar accumulating line of the Irish fund and for the US-listed fund, the TER, the tracking difference over the last few years, the share class, the trading currency and the spread seen at the time Hakim would trade. The figures for each fund fit on one line.
Do the same now: add expense ratio, tracking difference, share class, listing currency and typical spread to the two-fund comparison you started in lesson 5.1. Lesson 5.4 turns the finished comparison into a yearly cost figure.
Add the expense ratio, tracking difference, share class, listing currency and typical spread for both funds to your comparison.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).