Yes, you are - you would never invest in a U.S.-based fund with this expense ratio. This is part of the price of going the GV route. BPI looks more attractive, but I believe it’s not open for U.S. citizens.
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Suggest you review US IMGA investors tax filing for details…
I applied for the GV with an IMGA position. As a US investor, I just treat this as a portion of my international allocation.
I feel really grateful to this community for finding this option. IMGA has actually performed quite well over the last 1+ year and I feel fairly well-diversified and take solace in the fact that should I really need the money, I can sell my position at any time.
Yes, the fees suck and I now have a concentrated position in the Portuguese economy, but all else being equal, I prefer this to being tied up in a hotel project or commercial real estate as I had been previously considering.
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If your funds were already in € then I can understand the statement ‘not incur any currency exchange fees’. In which case this is not attributable to the fund or its features.
If, however, the funds are in US$ then how can one avoid conversion cost ?
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IMGA Ações fund kept pace with the S&P 500 since I invested in 2021 as of todays date.
| Investment (USD, divs reinvested) | Cumulative return | Annualized (CAGR) |
|---|---|---|
| IMGA Ações Portugal | +64.69% | +12.18%/yr |
| S&P 500 (total return) | ≈ +61.5% | ≈ +11.67%/yr |
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@cj807 - Hi Chris. Curious what the main concerns should be here for discerning investors like myself who are looking at Optimize’s “PGOF” fund not being compliant with FATCA? Also, did you end up going PGOF or some other ARI-friendly option such as IMGA?
Not only are open ended funds the only way to go, I suspect the closed end funds will now disappear or convert to open ended. People have seen that the Portuguese govt is willing to change the rules at the drop of a hat and they want to be able to pull out their investment.
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My understanding is that non-FATCA-compliant funds just won’t deal with Americans. I’m not one myself, so I was free to invest in BPI Portugal (lower fees). I actually assumed Optimize was FATCA-compliant?
optimize explicitly told me a few months back that they are fatca compliant
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Optimize PGOF is FATCA compliant and provide comprehensive reports for PFIC reporting
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On a related topic - PLEASE NOTE THAT MILLENIUM bcp (BANK) CAN’T SERVE AS CUSTODIAN FOR PARTICIPATION UNITS (at least it can’t for USA-based banking customers). Thus, if you’re an American wanting to apply for the ARI program, go instead with Bison Bank or Atlantico Bank. I think another viable option might also be BNI Europe.
Correct, and you’re right, that applies to US persons only.
Correct - can confirm BNI Europa is a viable option.
Hi All
I invested in the IMGA fund about 3 years ago, I’ve got my biometrics appointment in Jan 26. The fund has increase in value quite a lot, it’s now +60% so wondering if I can actually withdraw the amount that is is above the 500,000 ?
Given I haven’t actually been approved yet, could I reset the investment to 500,000 ?
Also I agree that the open-ended funds are the only way to go, I really appreciate knowing I can cancel the whole process and get my money back … plus I know exactly what the value is, no estimates as you get with most closed funds. Can’t recommend enough this path.
The general understanding is that you have to maintain your investment, ie the units you originally bought. So you can’t skim the profits. Equally, if you’re underwater you don’t have to make up the difference.
But if dividends are paid out you can keep them out right? So if you want to skim profits, you could try pick a stock with higher dividend (if there are that many stocks to choose from just in Portugal…)
The consensus seems to be that you can’t withdraw the principal but dividends are OK. A few funds are explicitly structured to provide cash flow to help deal with PFIC related tax issues for US investors. As this is a typical fund structure I would be surprised if there were issues around these sorts of dividends.
Further, a lot of real estate projects around prior to the rule changes a few years back also paid dividends and it was never an issue.
Other funds are structured to provide a huge up front return that they structure as a prepayment of dividends to be earned over the investment lock-in period. The intent is clearly to reduce to up front outlay of capital which seems somewhat at odds with the spirit of the ARI regulations. I’m not a financial professional or a lawyer but to my knowledge this hasn’t been litigated. I’d be wary of a fund structured this way, personally.
To your points about picking stocks - the investment needs to be in a privately held fund, you can’t just buy a bunch of stocks on the Lisbon stock exchange and call it a day. And even if you could there are aren’t exactly a ton of options on the Euronext Lisbon
Good to be wary. There were similar schemes with the Caribbean CBIs and some people who already received citizenships got theirs revoked over it.
Do you, or any other IMGA holders, know if you have any redemption penalties if you cash out within a certain timeframe? I know Oxy has a 3 year tiered penalty based on the deposit date (so you can’t say, move funds from a closed fund to Oxy w/out being subject to another 3 year penalty timeline). It seems like Optimize is penalty free as well?
IMGA is a publicly-traded fund so as far as I know, you can buy and sell as often as you wish just like any other mutual fund.