Vanguard extend ETF range

pip895

Slightly off track, sorry - I am thinking of purchasing an ETF outside a tax wrapper. As some/most of these ETF's are not UK based, is there an issue with CGT i.e are gains made, treated as income rather than CG. This might be an issue to me - how do I tell what the tax status of an individual ETF is?

SnowMan

pip895 wrote: »

Slightly off track, sorry - I am thinking of purchasing an ETF outside a tax wrapper. As some/most of these ETF's are not UK based, is there an issue with CGT i.e are gains made, treated as income rather than CG. This might be an issue to me - how do I tell what the tax status of an individual ETF is?

Yes you need to be absolutely sure the ETF has UK reporting status, or else you can end up paying income tax on capital gains.

I am not aware of any simple list that shows which ETFs have UK reporting status, so you need to check on providers websites etc.

Note that for ETFs that do have UK reporting status, there can still be an element of capital gain that is taxed as income called the 'excess of reportable income over distributions' see here for Vanguard amounts for example.

There was a discussion of excess reportable income over in the comments on monevator, ivanopinion eventually worked out how it all works (the relevant comments are not at the end but are near the end).

Glen_Clark

SnowMan wrote: »

So the 0.593 conversion looks like some sort of material currency conversion charge from x-o of between 1 to 1.5%

Thanks for your efforts :T this is what the forum is supposed to be about :money:
1 to 1.5% sounds a lot compared to Vanguards 0.09% total charge for running the fund (VUSA) But we have to remember thats a percentage of just the earnings, not the capital and earnings together as used in fund charges - which makes fund charges sound less than they are.

SnowMan

Interesting move by iShares to reduce the OCF (TER) on its regional ETFs which they have renamed their core range see

http://www.ishares.com/uk/individual/en/campaign/core-series/ishares-core-series

The OCFs (versus the Vanguard range shown in brackets) are:

FTSE100: 0.1% (0.1%)
Europe: 0.1% (0.15%)
America S&P500: 0.07% (0.09%)
Pacific exc Japan: 0.2% (0.22%)
Japan: 0.2% (0.19%)
Emerging Markets: 0.25% (0.29%)
All World: 0.2% (0.25%)

Note they aren't directly comparable because the iShares Japan, Pacific exc Japan, Emerging Markets, and World track the MSCI indices whereas the Vanguard ETFs track the equivalent FTSE indices.

And the iShares European ETF tracks the Eurostoxx 50 whereas Vanguard's European ETF tracks the much wider FTSE Developed Europe index.

The real downside of these iShares core ETFs seems to be that their S&P500, Japan, Pacific exc Japan, Emerging Markets, and World seem to be priced in $ (can't see any £ class). The equivalent Vanguard ETFs are priced in £ (although dividends are paid in $).

grey_gym_sock

i think they are all quoted in GBP as well as in USD, if you get the right ticker symbol.

for the S&P 500: SACC or CSP1 (2 ETFs, but i think to be merged)

for japan: SJPA

note that the price cuts are for accumulating ETFs, and the income ETFs remain more expensive.

that may be good: accumulating ETFs can be a very efficient way to reinvest the income, without worrying about how much your broker is charging in FX on the dividends, because your broker never sees a penny/cent of it.

OTOH, accumulating units will complicate your CGT calculations for unwrapped holding.

SnowMan

I've updated the google sheet to compare rates of Vanguard ETF dollar dividend conversion rates to sterling, to include my 27th June dividends.

https://docs.google.com/spreadsheet/ccc?key=0AhA6Przq6KI1dDhNeEpDWUtRMW00WDFMN3FCTU5rTHc&usp=sharing

Further evidence that First Direct don't apply the additional charges for conversion that most other platforms apply.

The declared dollar dividend rates (per share) are in the second sheet of the spreadsheet for others who want to check their own conversion rate (where their own platform don't show the breakdown).

Conversion rate =

sterling dividend paid / (no of shares held x declared dollar dividend rate)

Glen_Clark

Thanks for the update.
Just checked my x-o account and my VUKE dividend has been credited but not my VUSA and VWRL dividends yet. Will post again when they have.

Glen_Clark

Received my VUSA & VWRL dividends in my X-O account today Monday 30 June, dated Friday 27 June.
£0.5795 per $

bigsy

VHYL credited today (30th June) on Youinvest, exchange rate 0.584606.
Does the exchange rate reflect that on the 'pay date' (27th June) or the date it was credited to the account?

I'm awaiting VWRL and VFEM on IWeb.

gadgetmind

Back in April, I got £1.185745 for each VUKE share I hold. This sounds about right for dividends paid annually, but the table says they are paid quarterly.

I did buy before the 19th March ex date, but I don't understand the amount paid out. Hmmm, looking at historical figures shows that this was "a biggy" - Vodafone?