Been considering buying Rio Tinto in my 401k account for quite some time. I can’t seem to understand the foreign tax implications of this though. My understanding is that RIO is being taxed on their income, then that income that is passed along to shareholders is taxed an additional 30% since the dividend is “fully franked.” Seems like I’d be better off investing 100% within the in a 401k…..kinda sucks to miss out on solid investments such as Australian miners and semiconductor stocks like ASML, TSM, etc.
Am I missing something or am I late to the party and just realized why so many investors end up overweight in US stocks in their retirement accounts?
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