Hi,
I'm a US citizen living in Australia. I have about 1M in cash savings right now. I'm 31, with a medium risk profile, generally looking for something I won't touch for 20+ years.
I understand that I should avoid any non-US domicile ETFs because they are PFIC and a pain when it comes to tax returns. I also understand that if I choose non-Australian ETFs, then I won't get franking benefits. I am in the top tax bracket, so any dividends I receive will be taxed at 46% roughly.
If I'm going to split hairs about expense ratios between .04% and .15%, then it seems that I can also save a lot more by targeting ETFs with low dividend yields.
So for choosing a balanced portfolio, I'm leaning towards:
50% VUG (1.16% div yield)
25% Something else with a low yield (e.g. VBK, or perhaps an international ETF with low dividend yields?)
25% bonds
Would people agree with the above strategy? Or am I adding too much risk by shifting from VTI to growth shares for too small a gain? I'm figuring a 1% lower dividend yield will mean 0.5% more return per year on average for me after factoring in the taxes, which seems like a lot.
Thanks for any advice
Cheers
Submitted May 29, 2019 at 01:17AM by mistermuni http://bit.ly/2KgT1RU
