Is anyone here investing in US ETFs through an ISA account these days?
I opened an ISA (Individual Savings Account) last year and have been investing 500,000 won monthly in US ETFs (S&P 500, Nasdaq 100) through a dollar-cost averaging approach.
The main advantage of an ISA is the tax benefit (tax exemption on up to 2 million won), but with interest rates rising recently, I'm considering switching to short-term bond ETFs or MMFs. Equity ETFs are just too volatile.
What assets are you investing in through your ISA account? I've heard dividend stock ETFs and REITs are also good options, so I'm looking into them. Would appreciate any shared experiences.
7 answers
I've had similar concerns. These days, when interest rates are high, shifting some weight to short-term bond ETFs or MMFs seems like a good strategy. To maximize ISA tax benefits, it's important to receive taxable interest/dividends tax-free, so dividend stock ETFs or REITs are also solid options. I'm currently investing in a mix of SCHD and some REIT ETFs.
I’ve been consistently accumulating only the S&P 500 through my ISA, aiming for the long term without worrying about volatility. Switching to short-term bonds when rates are high feels too much like day trading to me, so it doesn’t really suit my style. I’ve seen opinions that dividend stock ETFs synergize well with tax benefits, but REITs are sensitive to interest rates, so caution is needed.
I'm also investing in U.S. ETFs through my ISA. Since interest rates are at a peak these days, I've increased my short-term bond ETF allocation to about 30%. Rebalancing within the ISA is convenient because adjustments can be made tax-free. Many people recommend dividend ETFs like VYM or SCHD, but I haven't tried them yet.
Have you checked whether dividend income tax is also tax-exempt when investing in dividend stock ETFs through an ISA account? I opened an ISA last year and put a little into a REIT ETF (TIGER REIT). The dividend yield is decent, but the price fluctuates with interest rate changes, so I'm considering switching to short-term bonds.
I think short-term bond ETFs (e.g., SHY, VGSH) are better than MMFs for maximizing ISA tax benefits. Dividend stock ETFs offer significant tax exemption effects, so I recommend them for long-term investing! I also hold covered call ETFs like JEPI in my ISA to manage cash flow.
I’m steadily accumulating only S&P 500 through my ISA, and I’m not touching short-term bonds or MMFs since their yields will obviously drop when interest rates fall. Dividend stock ETFs or REITs do align well with ISA tax benefits, but their returns may be lower compared to equity-type funds, so choose based on your goals.
Since the main advantage of an ISA is tax exemption, I'm heavily weighting dividend stock ETFs (e.g., SPYD) and REIT ETFs (e.g., TIGER US MSCI REIT). I'm preparing to shift some into short-term bonds when the timing aligns with rate cuts, but if you dislike volatility, moving to short-term bonds now doesn't seem like a bad idea either. Good luck, everyone!