najdorf

Utilities: Get Dividends Paid in Euros

The U.K. and U.S. have a special relationship on tax that doesn't exist between the U.S. and other European countries. All of the ones that I've looked at will withhold on dividends - Switzerland, Belgium, Netherlands, etc. I believe Germany is included as well.

Japan has a lower rate than the Europeans, around 8% I believe - I don't mind eating this on Nintendo or Toyota in an IRA.

There are two major problems that can arise for U.S. holders who hold international dividend stocks. First, in the IRA the issue is that the IRS doesn't care what happens inside the account - usually a benefit to the taxpayer but here a detriment because you can't take a credit against your U.S. taxes to make up for the foreign taxes. That is, international stocks in an IRA typically become taxable (internationally). As above, the only exception I know of among major nations is the U.K. Second, in a taxable account you may run into mismatches between the U.S. and international dividend tax that hurt returns or add hassles. As long as the U.S. and the foreign country have agreed on a 15% dividend tax rate (e.g. France above), the international stock acts similarly to a U.S. stock once you take the foreign tax credit on your 1040. If the other country automatically withholds at a higher rate, you have to apply to them for a refund which you may or may not be able to get and which may or may not be worth your time. The IRS is not in the business of making you whole on this transaction because they want you to do the legwork.

Hedge Funds Moving Into a New Marketplace

I did some further reading at

www.indexiq.com/downlo...

It appears that the actual hedge fund index is in the unfortunate position of trailing the S&P 500 over the past 5 years. So these guys made up a new hedge fund index via backtesting...that is, they looked back in time and figured out what sort of hedge fund index would have beaten the S&P by enough to make their fund seem like a good idea. This is kind of like looking back in time to find out that investing in Berkshire Hathaway, Walmart, and Microsoft would have been a good idea a long time ago, then creating a mutual fund that attempts to mimic the returns of having invested in those companies in a forward direction. Also the really high expenses and tax costs will wipe out a lot of this imaginary return. I can't believe this product exists.

Hedge Funds Moving Into a New Marketplace

The (misnamed) IQ fund should be able to lock up the market of "investors" who would like to pay 1.6% expenses to hold widely-known ETFs with expense ratios of .11% (Vanguard Bond). My head spins at how many stupid ideas I've just learned about from this one fund.

What's the value in tracking 9,000 hedge funds? I mean, maybe the top 10, 100 or 1000 have some market-beating potential, but how is it even conceivable to anyone that hedge funds 1000-9000 are going to outperform mutual funds or indexes?

How does holding a bunch of ETFs lead to tracking hedge funds? Hedge funds reveal little information about what they do with a long time lag, trade frequently, and engage in strategies you can't get with an ETF. If you could match hedge fund returns by investing in some of the most popular ETFs according to a mathematical formula, why wasn't somebody already doing this?

Let's assume that a hedge fund index is reasonable and possible. This fund isn't even doing it! They're changing weightings monthly according to some sort of ill-explained modeling.

The guy that runs this company thinks hedge funds are an asset class (quoted in linked article). He must know this isn't true. Hedge funds are a managerial strategy. The asset classes are listed right above here in the holdings - bonds, REITs, stocks, currencies, commodities, etc. These are the same things anyone invests in, usually at much lower expense levels than this fund. What matters is strategy, and this fund has one of the most dubious ones I've ever seen (unless we're talking about a strategy for managerial enrichment).