Question: I manage my share investments through ETrade and would like to invest in iShares Global Energy ETF (IXC ) how do I do this? What are the tax implications in investing in international ETFs?
Answer (By Paul Rickard): You need to open an international share trading account. ETrade offers this service.
As far as the Australian Tax Office is concerned, any income you make, or capital gains you receive, are classified as assessable income. Against this, you may also be subject to taxation from the US Dept of Inland Revenue. Should US taxes be levied, under a double taxation treaty with the US, the ATO will recognize any US taxes paid.
Question 2: With Woodside’s price crashing, but also oil crashing, is it considered a strong buy at present – seems to now have a great dividend yield?
Answer 2 (By Paul Rickard): The brokers have gone decidedly neutral on Woodside, seeing it as one of the energy stocks that will be less impacted by the oil price decline. According to FN Arena, the consensus target price is $38.11 compared to a price of $35.62 around midday.
That said, it looks like we will continue to see some further declines in the oil price, so it is hard to imagine that Woodside will not be impacted. Brokers have downgraded their 2015 earnings forecasts, and are now factoring in a dividend cut in FY 15. While buying in the “gloom” is the obvious strategy – I would only be nibbling at the moment – my sense is that there is more share price weakness to come.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.