Vnq

JohnRo

Having scratched around I've found what seems the ideal investment to add, as a key US component, to the property allocation in my income portfolio.

VNQ, the worlds largest REIT ETF by far and yet can I get access...

Does anyone know where this ETF, listed on the NYSE, can be purchased in the UK?

I have active accounts with CSD, iWeb, SVSxo currently and none offer this.
I suspect TD might be the only option but don't have an account with them currently and using their ETF selector doesn't produce a hit for VNQ.

It's all a tad frustrating.

I've searched a few and IUSP seems the nearest/best/only alternative though not nearly as cheap and offers a lower historical yield.

bowlhead99

Looking at my TD app I can put an order in for VNQ and VNQI, I just select "US market" and can search for them by ticker and get a little price chart which tells me you should have bought it a few days ago

Unlike with UK stocks, when I placed a dummy order to check, it doesn't give you a 15 second price countdown to accept the trade, you just place an "at market price" order and they will deal it for best available price if there isn't enough market liquidity or a real time market maker price feed to give you the instant quote.

I've had an ISA with TD for years, you can hold stocks from various overseas markets, no ongoing fees (if you're not holding funds) where you have more than about £5k with them or are doing a regular investment plan - so quite useful for shares, ITs and ETFs.

If you're holding unwrapped then a further good feature at TD is multi currency cash account to hold your sales proceeds or dividends in USD or EUR etc - though the FX fees if you do choose to go back and forth from sterling to something else are steeper than I would like.

JohnRo

Thank you, I'll have a look at a TD account when the time comes to add this, I'm familiar with the multiple currency aspects on the platform unless it's changed significantly in the last couple of years.

The foreign exchange fee at TD looks reasonable compared with somewhere like iWeb but with their trade commission on top, at first glance, might prove prohibitive given the relatively small amount I plan invest in VNQ.

iWeb do offer VNQI but not VNQ which is just bizarre (and rather annoying) since their 1.5% FX conversion fee also includes their trade commission as well, quite an attractive rate for smaller sums, but no VNQ rules them out.

Choosing based on the differences in the ongoing charges and the potential yield between VNQ and something like IUSP would be a no brainer, when neglecting the FX and higher commission charges, but they can't be neglected, so I'll have to weigh up the FX fees and commissions equation.

It looks like TD will want €50 for each trade and an ongoing €45 account maintenance fee (presumed annually) which will in my case rule out the VNQ / TD option if that's right.

edit: this info was taken from TD international - wrong website dammit.

As you say linking an ISA valued at £5.1K+ negates all TD account fees, problem then arises that the bulk of the portfolio will be elsewhere and getting it's share of the remaining annual ISA allowance.

grey_gym_sock

i've bought VNQ with youinvest. for their standard £9.95 dealing charge, + 1% currency conversion (on both purchase and sale). and 0.5% to convert $ dividends back to £.

this was inside a SIPP, which had the advantage of eliminating US withholding tax on the dividends. AIUI, an irish vehicle such as IUSP will have lost 15% in withholding tax on US dividends, though nothing further is withheld in ireland.

JohnRo

GGS I read the reply you made in another thread about this VNQ IUSP conundrum after posting above and then searching for the info afterwards, as you do... useful info there thanks.

bowlhead99

Yeah looks like those fees are from the European TD site; the UK one is http://www.tddirectinvesting.co.uk/rates-and-charges/

They have 6-monthly inactivity fees if you don't have any transactions in the 6 months, but waive it for a larger account or if you also have an ISA with them (and the ISA fee is waived on a pretty small balance or if you set up regular investments). So total cost of ownership is not massive.

Another one to maybe consider if you're buying US listed stocks would be IG Group who have only had a proper sharetrading service alongside their spreadbets etc for a relatively short time but costs on buying dollar stuff seems competitive. They could probably tell you if VNQ is available.

I have a Youinvest account too (a SIPP like GGS) and they are a decent company to deal with.

JohnRo

I've plenty time to scratch around for a solution, you've pointed me in the right direction and this won't be happening before April. Thanks again.

JohnRo

I've opened an account with Hargreaves Lansdown and settled on eventually holding VNQ unwrapped with them.

Ruled out the SIPP option due to costs, given the relatively small sum going in and I also want the flexibility of investments being accessible should the need arise.

It won't be a vast sum and it won't be getting topped up more than once every year or two, so the slightly higher dealing charge and fx rates shouldn't do too much damage. I've completed the W8, just have the 15% US WT to stomach.

What costs are involved should be at least offset by HL's no inactivity or platform custody fees. No minimum balance or linked ISA account requirements either.

All considered it seems like the best place currently, given the above, unless I've overlooked something important.

TheTracker

grey_gym_sock wrote: »

this was inside a SIPP, which had the advantage of eliminating US withholding tax on the dividends.

Not gone down this path myself but aren't you only eliminating the withholding tax on the dividends paid to you by the etf, not the underlying tax on underlying foreign fund dividends?

aspiration_2

TheTracker wrote: »

Not gone down this path myself but aren't you only eliminating the withholding tax on the dividends paid to you by the etf, not the underlying tax on underlying foreign fund dividends?

When it comes to withholding taxes even many advisors in fund houses scratch their heads and give confusing answers.

Can someone please confirm that there will be no withholding taxes (US, Irish etc) in an ISA?

bowlhead99

No



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