Vanguard account in Ireland

corglass

Hey

It seems Vanguard.com's investment accounts are one of the best in the business in terms of diversification, low fees and overall market credibility. However opening an account is restricted to US residents / US SS# holders only.

Anyone know of a good alternative offering similar investment opportunities in US stocks with low fees in Ireland / available to Irish nationals?

Thanks

fyfe79

Sorry corglass, I don't have the answer as I'd like to know too!

I've been reading the "Millionaire Teacher" and they guy recommends the following investment breakdown for someone in their 30's:
35% Vanguard US Bond index (VBMFX)
35% Vanguard Total US Stock Market index (VTSMX)
30% Vanguard Total Int. Stock Market index (VGTSX)

I'm newly signed up with TD Direct Investing and I've invested some money into stocks already but would love to know if I can do something similar to the above with TD Direct or would the fees kill me. Or can Irish citizens even take advantage of indexes like that? I'm assuming US citizens would be more favourably taxed. Once Irish citizens complete the W-BEN's, are we ok? I know we'll get nailed for 30% capital gains regardless.
Too many questions, sorry :-)

fyfe79

Actually OP, just seen this other recent thread has some answers:
http://www.boards.ie/vbulletin/showthread.php?t=2057635609

Irish brokers can offer Vanguard ETF's (not the same as indexes).
DeGiro seems to be the best bet for ETF's due to their very low or non-existant fees.
https://www.degiro.ie/fees/commission-free-etfs.html

fyfe79

fyfe79 wrote: »

Vanguard US Bond index (VBMFX)
Vanguard Total US Stock Market index (VTSMX)
Vanguard Total Int. Stock Market index (VGTSX)

Ok, on Degiro's page I think I see the equivalant Vanguard ETF's:

Vanguard US Bond index (US9219378356)
Vanguard Total US Stock Market index (US9229087690)
Vanguard Total Int Stock Market index (US9219097683)

Price of each is approx: $84, $112, $47.

EDIT: Sorry for hijacking this thread, I was obviously looking at the wrong ETF's when making the previous comparison which I've now deleted.

The tickers are: BND, VTI and VXUS

Degiros offer these commission-free if you buy one a month. You can then add to each one commission free (if the amount bought exceeds $1000).

Francie Barrett

fyfe79 wrote: »

Once Irish citizens complete the W-BEN's, are we ok? I know we'll get nailed for 30% capital gains regardless.
Too many questions, sorry :-)

Once you complete the W8-BEN, the CGT rate goes away but dividends still get taxed 15%.

Francie Barrett

fyfe79 wrote: »

Ok, on Degiro's page I think I see the equivalant Vanguard ETF's:

Vanguard US Bond index (US9219378356)
Vanguard Total US Stock Market index (US9229087690)
Vanguard Total Int Stock Market index (US9219097683)

Price of each is approx: $84, $112, $47.

EDIT: Sorry for hijacking this thread, I was obviously looking at the wrong ETF's when making the previous comparison which I've now deleted.

The tickers are: BND, VTI and VXUS

Degiros offer these commission-free if you buy one a month. You can then add to each one commission free (if the amount bought exceeds $1000).

There is no difference. $1000 in BND and its equivalent VBMFX will by buying you 99.999% the same thing.

fyfe79

According to the guy who wrote that book, if you buy into all 3 of those ETF's and redistribute once a year (to bring back to a 35/35/30 split) you'll earn between 10-12% on average and beat the managed funds. Worth a shot.

Francie Barrett

fyfe79 wrote: »

According to the guy who wrote that book, if you buy into all 3 of those ETF's and redistribute once a year (to bring back to a 35/35/30 split) you'll earn between 10-12% on average and beat the managed funds. Worth a shot.

Temper your expectations.

10-12% was possible because interest rates and inflation were running at 5%. Today inflation and interest rates are more like 1-2%, so likely returns are going to be more like 7-8%.

corglass

Thanks guys for the info. DeGiro seems to be the shout.

The J Stands for Jay

corglass wrote: »

However opening an account is restricted to US residents / US SS# holders only.

I have a US SS#, but I'm resident in Ireland. Would I be able to open an account with Vanguard? I intend buying their ETFs through DeGiro in the near future (once I've done a bit of research), but going direct may be of interest.

Francie Barrett

McGaggs wrote: »

I have a US SS#, but I'm resident in Ireland. Would I be able to open an account with Vanguard? I intend buying their ETFs through DeGiro in the near future (once I've done a bit of research), but going direct may be of interest.

I wouldn't recommend it. Firstly, you'd need a US address. Secondly if you did get an address, it's likely the IRS would start taking interest in you. Unless you're already filing a US tax return, you don't want to go there.

Anyway, it's very very easy to just buy Vanguard ETF's here in Ireland.

ftse100

Francie Barrett wrote: »

Temper your expectations.

10-12% was possible because interest rates and inflation were running at 5%. Today inflation and interest rates are more like 1-2%, so likely returns are going to be more like 7-8%.

You can't say likely returns are going to be 7-8% at all! Thats just a silly statement. You can't predict future returns in the Bond / Equity Market

fyfe79

ftse100 wrote: »

You can't say likely returns are going to be 7-8% at all! Thats just a silly statement. You can't predict future returns in the Bond / Equity Market

Nothing is guaranteed of course, but to be fair, I think Francie was basing his comment on what I said about the yearly instruction to sell off a 'winning' ETF gain to prop up an under performing EFT, and maintain a 35/35/30 split. On average this strategy has proved to be a winning formula. All the facts and figures are in that book I mentioned.

ftse100

fyfe79 wrote: »

Nothing is guaranteed of course, but to be fair, I think Francie was basing his comment on what I said about the yearly instruction to sell off a 'winning' ETF gain to prop up an under performing EFT, and maintain a 35/35/30 split. On average this strategy has proved to be a winning formula. All the facts and figures are in that book I mentioned.

Do you think a 7-8% p.a return is viable ? What about FX effect and the fact you only re-balance once a year? Would positions not deviate a decent amount from target split?

fyfe79

ftse100 wrote: »

Do you think a 7-8% p.a return is viable ? What about FX effect and the fact you only re-balance once a year? Would positions not deviate a decent amount from target split?

Per annum? No. The markets are too unpredictable in the short term. My point was more that in the long term, the markets appear to be cyclical and you will gain. The example given in that book was (allegedly) real-life advice he gave to a friend who invested from 2006 to 2011 and gained over 30% in that time frame, due to re-balancing once a year to keep the same split between his US Stock, International Stock and Total Bonds. If one of them was up one year and the other two were down, he would sell-off the gain from the performing EFT and buy more of the under-performing ones. This would re-align the target split.

ftse100

fyfe79 wrote: »

Per annum? No. The markets are too unpredictable in the short term. My point was more that in the long term, the markets appear to be cyclical and you will gain. The example given in that book was (allegedly) real-life advice he gave to a friend who invested from 2006 to 2011 and gained over 30% in that time frame, due to re-balancing once a year to keep the same split between his US Stock, International Stock and Total Bonds. If one of them was up one year and the other two were down, he would sell-off the gain from the performing EFT and buy more of the under-performing ones. This would re-align the target split.

You will gain but not after inflation has wiped away a portion of it

Francie Barrett

ftse100 wrote: »

You can't say likely returns are going to be 7-8% at all! Thats just a silly statement. You can't predict future returns in the Bond / Equity Market

I am not predicting anything, note the use of the word likely. I was merely making the point that long-term fixed income yields are low, therefore equity yields are likely to be lower than the 10-12% number that was quoted. The figure I stated was a simple extrapolation that is more realistic in the current environment.