Hi all

I wish to purchase shares in the American stock Cambria's Global Value ETF (GVAL) managed by Meb Faber. The fund's investment strategy resonates with how I want to gain international exposure. Basically the fund based in the US purchases overseas companies in distressed economies.

My query for discussion is how the taxation of an Australian individual shareholder would operate.

My current understanding is as follows:

1. The companies in the distressed economies will pay tax on their profits at their corporate tax rate.

2. These distressed companies will make dividend payments to GVAL. The profits GVAL makes on these dividends will be taxed at the 35% US corporate tax rate in the hands of GVAL.

3. The profits of GVAL will then be distributed to its shareholders. Assuming that shareholder is an Australian individual this dividend payment is taxed (AGAIN for the 3rd time) at the individual's marginal tax rate without access to any franking credits.
Note: the individual will have to pay a 15% withholding tax on the dividend however this can be claimed back as foreign tax paid when they lodge their tax return - so I consider this really just a cash flow issue.

Is this really the case? If I invested in GVAL is the profits i will be exposed to really be taxed at approximately 30% three times? This just seems outrageous and really discouraging to gain exposure in these foreign income stock. How do you rationalize paying so much tax compared to Australian investments?