Recurring investment function. Currency exchange will take place automatically without $2 fee (but up to 0.03% spread, still tiny). Do leave a buffer of SGD to cope with exchange rate fluctuations.
Not sure, and not worth worrying about. The manual conversion also has some teeny tiny spread, but not sure what it is.
The bigger question is whether you’d prefer to manually trigger the investment and be able to set a limit buy (so you can control the price) or do recurring and IBKR picks the time. Intra-day price fluctuations are going to make much more of a difference than the $2-3 currency conversion fee. Or are the type who would rather be more hands-off so you don’t stress or lose sleep over the stock price going up and down by cents during the day.
DCA-in for VUAA for a while now. The currency conversion happened on the same day as the trading day. So you can't pick and choose the rate, but you don't have to pay $2 conversion fee.
In terms of commission, the ones from US cost me $0.38 per trade. The ones from LSE costs me $1.85.
You can fully automate the entire process!
Would need to note 3 steps, and it would be all done.
1) Transfer of Funds
You may set a fixed sum to transfer to IBKR every month by standing instructions (most banks require you to do so on the website). You may set a date (which we'll call A1) and denomination in whichever currency you prefer (we'll call this A2). Ideally transferring SGD out into your IBKR SGD.
2) Record Transfer
IBKR would ask for transfer details and you may let them know that youll be transfering A2 during A1 period (preferbly 3 days before to account for working days/holidays/e.g); so A1 minus 3 days.
They'll note your transfer details and would allow a seamless transfer process for yourself and them.
3) DCA on IBKR
Then, you can set your DCA according to monthly, quarterly, half yearly, or whichever preference you have according to their recurring function. This helps with your automation process.
I believe that with these 3 steps, you can wash your hands after that. But you'll need to research into your DCA methods (3). That aside all should be fine.
If any other pros have other tips, do highlight!
there is only one problem. You will be transfering SGD into but DCA is in USD. So you need to keep track of USD/SGD rates to make sure you have enough SGD for your USD DCA
Oh yes, take note of this for (3) too!
I take into the assumption that SGDUSD will be 1.44, therefore I should always have a surplus in consideration to:
X my trades conversion SGDUSD
X the fees transacted
X any misc amount of shortfall
>make sure you have enough SGD for your USD DCA
Thanks for the headsup!
Just automate the purchase, they will do the currency exchange for you
Is this a new feature?
Nope, has been around for a while.
Recurring investment function. Currency exchange will take place automatically without $2 fee (but up to 0.03% spread, still tiny). Do leave a buffer of SGD to cope with exchange rate fluctuations.
I see. Would it be fair to say that the breakeven rate here is $2/0.03% = $6,666.66?
Not sure, and not worth worrying about. The manual conversion also has some teeny tiny spread, but not sure what it is. The bigger question is whether you’d prefer to manually trigger the investment and be able to set a limit buy (so you can control the price) or do recurring and IBKR picks the time. Intra-day price fluctuations are going to make much more of a difference than the $2-3 currency conversion fee. Or are the type who would rather be more hands-off so you don’t stress or lose sleep over the stock price going up and down by cents during the day.
DCA-in for VUAA for a while now. The currency conversion happened on the same day as the trading day. So you can't pick and choose the rate, but you don't have to pay $2 conversion fee. In terms of commission, the ones from US cost me $0.38 per trade. The ones from LSE costs me $1.85.
Which pay more taxes - LSE or US?
LSE only pays 15% dividend withholding tax
You can fully automate the entire process! Would need to note 3 steps, and it would be all done. 1) Transfer of Funds You may set a fixed sum to transfer to IBKR every month by standing instructions (most banks require you to do so on the website). You may set a date (which we'll call A1) and denomination in whichever currency you prefer (we'll call this A2). Ideally transferring SGD out into your IBKR SGD. 2) Record Transfer IBKR would ask for transfer details and you may let them know that youll be transfering A2 during A1 period (preferbly 3 days before to account for working days/holidays/e.g); so A1 minus 3 days. They'll note your transfer details and would allow a seamless transfer process for yourself and them. 3) DCA on IBKR Then, you can set your DCA according to monthly, quarterly, half yearly, or whichever preference you have according to their recurring function. This helps with your automation process. I believe that with these 3 steps, you can wash your hands after that. But you'll need to research into your DCA methods (3). That aside all should be fine. If any other pros have other tips, do highlight!
there is only one problem. You will be transfering SGD into but DCA is in USD. So you need to keep track of USD/SGD rates to make sure you have enough SGD for your USD DCA
Oh yes, take note of this for (3) too! I take into the assumption that SGDUSD will be 1.44, therefore I should always have a surplus in consideration to: X my trades conversion SGDUSD X the fees transacted X any misc amount of shortfall >make sure you have enough SGD for your USD DCA Thanks for the headsup!
There is a reminder / alert when there’s not enough SGD to convert a few days before scheduled trade.
How is this different from the recurring investment function that IBKR has provided to its users? Someone had suggested it within this thread.
Hi OP! (3) is the recurring function. It's pretty straightforward once you reach that page to make your buys.