Since I made my round of analysis of Russian companies I have been very interested in making an investment there. It did however encounter a couple of problems...
It did not appear to be easy to buy directly from the Russian market.
Some Russian companies have ADRs (so buying in the US) but that causes double taxation of dividends.
Other companies had GDRs (often traded from London or Frankfurt) which will make dividend taxation easier but...
there were so many of them that were interesting and I simply ended up feeling too scared about stepping into a Russian company with a GDR.
I started thinking more and more about ETFs and after reading up on it, and especially on the two options that were being offered to me from Deutsche Bank since I am both a customer as well as a shareholder there, I found that I was still not satisfied concerning the costs and I therefore called them up.
In the end I was shuffled around to four people and I received an answer on two out of three questions but those two answers I do not trust fully. The most beautiful encounter was the first one. He must have been a blown up alpha-male gorilla that was so incompetent that he did not even listen to my questions and were just talking, talking, talking and then passing me on. Extremely unfriendly and I do not understand why this person is allowed to answer the phone.
The second encounter listen to my question and directly said he could not answer it and passed me on to the colleague that should be able to answer the question. This person was at least friendly.
The third encounter was sad. This guy was then sitting in the wealth management office here in Berlin responsible for funds and could not answer a single one of my questions. He claimed it was due to that he did not know Russia funds. Which really does not matter at all since neither of my question was based on the fund and the composition thereof. So I was passed on again. I would not say that he was unfriendly but simply extremely incompetent.
The fourth woman was listening to my questions and tried to answer two of them. The third one she refused to listen to since I uttered the word tax which I obviously should have avoided since that seems to be a magic word that makes bank people go deaf.
It was two different funds. One pays out dividends and the second one does not pay out any dividend (so directly re-invest the dividend) and it also had a possibility to make monthly savings.
My three questions were:
1. On the dividend paying fund besides from having 0.45% management fees there seems to be a subscription fee of 3%. Is this only for the people making monthly savings that then pay 3% month they invest or is it being paid yearly?
"Her answer was that everyone have to pay that and it is being paid directly." To me that does not make sense. If I buy shares in a ETF on the trading desk then for what reason should they besides from the trading fee take any more money from me. So I think her answer was wrong and only concerns the savingsplan.
2. How is the management fee being paid? Is it paid once per year from my account as cash or is it by decreased number of shares in the fund?
"By decreased number of shares in the fund." Here I really do not know if it is correct or not but I think her answer here was correct.
3. German tax rules says that I have to pay taxes on dividends which disturbingly from what I have understood includes even any direct re-investments of dividends. So for the ETF fund that pay out dividend this is no problem and taxes are directly paid but for the non dividend paying fund I was once again wondering how that was paid. Was it paid over decreased shares or as cash from my account?
As soon as she heard taxes mentioned she then refused to hear the entire question. I gave up. Wished her a pleasant weekend and said goodbye.
Afterwards I was very disappointed both as a customer as well as a shareholder. More so from the point of view of a shareholder. Because there I was, asking questions to make an investment in an ETF fund that will generate money to them and they were not able to help me which in the end means that my money will go somewhere else and I need to reconsider both my shareholder as well as customer presence... since DB seem to run a non-profit organization.
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