Bought 20 VTI and 40 UPRO.
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All I am saying is there is always a reason why people make changes. Very few (really very few) can manage set & forget allocation strategies.
I am not saying itās good to react. I am just saying itās normal to react
For now I didnāt change anything . I am underweight US anyways and I plan to keep it that way.
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To be fair thereās two different things. Market valuations I think people should just stick to their prior decision (usually not good to revisit and be influenced by the news).
But thereās also taxation/market access risks, historically with the direction of globalization/trading barriers being removed it was something you could ignore.
Now weāre going into the realm of investment decision impacting things becoming a possibility (even if still low probability).
E.g. punitive taxation of dividend distribution to foreigners, this might not happen but this has been floated in presidential orders (so itās not outlandish). For me at least the possibility of those means having to think about what the options might be (not taking any action for the time being, being starting to draw a plan).
Hm, as a boglehead I thought the majority of experienced investors stick to their asset allocation and donāt react on the news. What I see is that mostly young people search for their portfolios: some use leverage, some are charmed by factors, some time the market trading in and out. The thing is that young people donāt have lots of capital and the losses are relatively limited, just because they donāt have large capital at stake.
Once you are older, you trade very conservatively, as you have a relatively large portfolio and years of stomaching of market volatility.
Maybe I am wrong and have rosy view, Who knows.
By the way, pension funds that hide investment details from common people is a good thing.
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To tax dividends more heavily than they are taxed now, the U.S. will have to break tax treaties. I have no idea if you can do it without approval of the Congress.
Anyway, increasing withholding tax from 15% to 30% will (in current valuations and dividend yield on global market cap like VT) result in 0,13% higher annual costs. I would say itās non-event.
Meddling with property rights and capital controls would be red flag for me, however.
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The world is made for common people because common people barely have enough skills to stumble through life without causing great harm to themselves and others. I personally donāt feel I can trust most people to deal with anything more complicated than a bowl of ice cream and a spoon.
Probably, but Iād like to think that us here and the bogleheads should be better than the masses.
Funnily enough, a silly meme dividend community on reddit is very cheery lately so maybe theyāre the ones staying the course indeed 
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Nope, the thing in the executive order was using some old/unused process to bypass this (section 891).
Normally treaties would supersedes this, but I donāt really trust the current administration wrt international treaties (and they could just vote a new version of 891 since apparently thatās the only thing that matters to make sure the code takes precedent in the US).
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If they increase withholding tax on US distributions, then it would be a technical thing. Weāll have to answer some questions, like if US ETFs are still best option tax-wise (if you can offset even higher withholding tax against your national taxes, who cares)? Maybe it would be enough of a nudge to dump VT and go the UCITS route. Synthetic US replicators may become attractive, and so on. Itād be jsut a technical thing.
Really disappointed here, @Mirager ā¦ arenāt you Greek?
The Greeks basically invented democracy!
Giving the common people* the weight and authority to make important decisions!**
* Ok, fine, you had to be a non-slave, native and male (like in Switzerland until, ahem, March 1971). And probably not a sheperd or so.
** Like the flavor of the ice cream in the bowl.***
*** Plain vanilla for the always correct majority, right?
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Thatās what Iām saying and what Iām monitoring (and trying to derisk some of it). (Just a technical thing isnāt trivial when it can mean rotating your entire portfolioā¦)
In my case it would be easy: sell VT, convert currency, buy UCITS. If done within a minute when both EU and US markets are open, I would not incur costs apart trading costs and spreads.
The only thing is that I have not made my mind up how to replicate VT on the UCITS side. SPYI (MSCI ACWI IMI) has too much sampling for my taste. As I prefer Vanguard, it misses small caps; combining FTSE index with MSCI World SC is not pretty (would do the job, but ugly).
If there were a good VT-like fund on the UCITS side I would likely invest in it.
Another thing that can be possible is following
In addition to higher WHT (to match the locals) , also apply capital gains tax for foreigners to match the US counterparts. Today Capital gains is part of jurisdiction of country where investor is resident
But - it can be called āunfairā why Swiss residents pay 0% CGT and Americans pay so high rate when the gains are coming from US assets. This is actually already the case for Indian stocks where capital gains tax is paid by everyone (irrespective of where the investor is located)
One can argue this is approaching disregard to DTAA. But I donāt think itās completely a no-go with current regime.
For this -: I donāt think domicile of ETF matters. What matters is US investments.
Of course this is different than controlling assets themselves which would make UCITS more protected versus US ETFs
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Personally I think WEBG is good enough replacement of VT
It has enough stocks worldwide. It doesnāt have small caps but do we really need them.
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Iāve thought about this but havenāt spent time to find out the details.
When we sell a unit (a share) of WEBG for instance the CGTs we pay are calculated based on our tax domicile. However the ETF itself has to reflect the change too, and by doing this it has to sell however many corresponding shares, right? Could CGTs be somehow added as a cost calculation to reflect the individual investor selling? So if you see $100/WEBG share and you sell you actually receive $99.5 (with $0.5 being CGTs on US securities in the ETF)? I donāt know, just speculating how such a charge could be implemented.
Similarly with dividends, thatās easier as WHT is done at source, and could well be changed so that all outgoing dividends from US companies to ex-US funds, and then to ex-US investors, could simply be taxed more at source. So the % lost to IE ETFs will just go up.
If they start taxing cap gains, it would also be red flag. But they would not, because itās so easy to avoid cap gains tax using UCITS.
I want small caps. Partly because in the past years they significantly underperformed large / midcap. Switching to VWCE/WEBG would fix this underperformance forever. I know I know sunk cost fallacy, but itās my taste.
And I would not go Amundi anyway, unless they establish reputation for 5-10 years. They did funny things in the past.
Okay.
Then I think IMID is only real alternate for a one ETF solution
Thatās the magic of ETFs, compared to mutual fund they avoid internal capital gains since they only do in-kind transfers with the AP.
(thatās why vanguard mutual funds are often preferred in the US since they have the patent for structuring the mutual fund based on the ETF, patent is expiring soon tho)
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So we are back to the fact that there is no good one-ticker solution to VT on the UCITS side.
Taxation of events occurring within ETFs is magic indeed.
Only @nabalzbhf or @Dr.PI can handle this.
However CGT even for us as investor is only when we sell the ETF.
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If you want all components of VT , then yes. There isnāt one to one alternate
Following can come close to it.
WRDUSY + EIMI + WSML