I used to buy VWRD on the LSE and a local equity etf and local bond etf. 80-20 equity to bonds and 30-70 local to global. The choice of VWRD was to avoid the 30% dividend withholding tax and possible future estate taxes from buying a US etf.
However, I found it rather burdensome to rebalance, especially since it involves currency conversions. I would also have to dollar cost average manually.
Recently there've been some robo-advisors that invest passively (ie with no 'tactical asset allocation'). I would be willing to pay that fee for the convenience for being able to DCA and not have to invest manually. But I want a better sense of the costs. However:
- Robo A uses UCITS funds and DFA which have higher TER,
- Robo B mainly uses Vanguard's US ETFs (vti vgk vpl vwo in the right proportions) which have a lower TER but 30% dividend withholding tax to me.
E.g. assuming A has fund expense ratio of 0.35% (for DFA world equity) and B has fund expense ratio of 0.1% (the vanguard ETFs), would this be a decent rough estimate of costs before the robo's fees?
A = 0.35%
B = 0.1% + 30% X 2% = 0.1% + 0.6% = 0.7%