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ADR's: ER and foreign tax credits
Old 12-21-2005, 02:24 PM   #1
Recycles dryer sheets
Join Date: Feb 2005
Posts: 454
ADR's: ER and foreign tax credits

I'm thinking of selling my small position in Korean fund MAKOX (ER too high) early next year, and instead buying two or three Korean ADRs.
(I'm not worried about diversifcation issues or market timing or performance chasing concerns, not looking for feedback on those touchy subjects )

The Bank of New York website brags about how cost efficient they are, but I can't easily follow their discussion, as I'm not in the business and don't know the lingo.
I've noticed that some "good" mutual funds use ADRs (including Korean POSCO for instance) so they probably are cost efficient compared to holding the foreign stock, even for an institution, at least sometimes.
I'm not too worried about a small loss when buying and selling, but don't want significant yearly bites taken out.

Also, does anyone know if foreign tax credits get pased through, like they (usually) do on foreign CEFs? I suppose I could claim them even if not shown on tax forms, but that might be asking for an audit.
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