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Bank for once-off share purchase

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  1. #1

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    Bank for once-off share purchase

    GF wants to buy around 150k of S&P500 shares once-off. I think she is with BEA and wants me to go with her to open a trading account with them.

    What can she expect fee wise? From what I remember is that HK banks are a rip off when buying shares through them, but don't think she wants to go the online brokerage way. Any other bank recommendations, or should she stick to her primary bank for this?

    Cheers


  2. #2

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    HSBC ....USD 18 for upto 1000 shares.

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  3. #3

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    https://www.hsbc.com.hk/accounts/products/one/offers/

    HSBC seems to be running a promotion

    and given the large amount, would you consider dollar cost averaging into the S&P 500? i personally think that that is a better strategy then a bulk purchase for so many shares

  4. #4

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    USD150k or HKD150k? Looking to buy a US listed ETF or an HK listed ETF?

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  5. #5

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    Check also if they charge custodian fees.. that could be a drag if its a lumpsum and your portfolio is not large.

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  6. #6

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    @muzzdang, how do the fees of monthly investment plans compare to a once-off contribution?
    @pin, 150k HKD. Do HK banks offer US listed S&P500 ETFs like VOO? What are the pro's and cons of buying US vs HK listed? From what I understand is that HK listed ETFs have low liquidity? Not that that would be too significant for someone like her I suppose.

    I have only used online brokers before so my knowledge on actual banks is a bit limited.


  7. #7

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    Quote Originally Posted by Crankshaft:
    @muzzdang, how do the fees of monthly investment plans compare to a once-off contribution?
    @pin, 150k HKD. Do HK banks offer US listed S&P500 ETFs like VOO? What are the pro's and cons of buying US vs HK listed? From what I understand is that HK listed ETFs have low liquidity? Not that that would be too significant for someone like her I suppose.

    I have only used online brokers before so my knowledge on actual banks is a bit limited.
    There's only one HK Listed ETF for the US market - 3020.hk. It is MCSI Total US Stock and not S&P500, but otherwise much the same.
    Main advantages are no currency exchange costs for moving HKD->USD->HKD and currently the way it is structured means zero effective withholding taxes. Fees are 0.15%. Main disadvantage is very low trading volumes which means there is about 1% bid-ask spread. Other disadvantage is the witholding tax rules on dividends might always change (the rules went from 0% under Bush to 30% under Obama to 0% under Trump). A third disadvantage is that the issuer (Xtrackers) has a history of delisting ETFs (they delisted 3019.hk and a few other earlier this year).

    ETFs listed on the US stock exchange have 30% withholding. So effectively the total drag with fees and taxes that will be about 0.45% per year. Bid/ask spreads are much much lower. If your girlfriend eventually wants the money back in HKD, then the exchange rate changes will negate the savings in bid/ask spread.

    Regarding DCA vs Lump Sum - DCA is worthwhile for those who are saving up rather than waiting at the end to do a lump sum. Or if you are investing in a volatile instrument such as possibly a single company. For a diversified pool such as an ETF I would not bother.
    shri, LoganH, Crankshaft and 2 others like this.

  8. #8

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    Oh yea... I was thinking of 3140, but forgot it got delisted. So I guess my recommendation for her would be either 3019 or 3020. Leaning towards 3020 and opening an account with HSBC, unless there's another bank out there with lower fees.

    Last edited by Crankshaft; 28-12-2021 at 09:20 PM.
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