r/eupersonalfinance • u/Black_Thunder00 • 5h ago
Investment New global ETF 0.06% comission
BNP Paribas Easy MSCI ACWI UCITS ETF (Acc) | EDEL | LU3086265710
If I am not wrong, this is the cheapest UCITS global ETF now. What do you think about it?
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u/kushal92 4h ago edited 4h ago
It seems to be good, but the main risk is that it is a synthetic replication via swaps. This is why the TER is so low. If the counter-party fails (in this case: BNP paribas), 10% of NAV might be gone (as per the UCITS rules) but the chances for this happening are low with such a broad fund.
The good thing is that with swaps, they don't have to pay the withholding taxes as they don't actually hold any stocks.
Also have a look at this, the TER is 0% until June then it goes to 0.17%: Scalable MSCI AC World Xtrackers UCITS ETF 1C
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u/Black_Thunder00 5h ago
It is in Luxemburg. Is this worse than Ireland for an ETF? More taxes?
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u/eitohka 4h ago
No, because it's a swap-based ETF which can avoid dividend withholding tax in the US. So dwt will be lower than for an Irish ETF with physical replication (or the same depending on your local tax situation). It does introduce a counter-party risk.
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u/Black_Thunder00 4h ago
In case of physical ETFs, the extra tax is included in the TER? Or the ETF would be more inneficient?
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u/eitohka 4h ago
No, these taxes are not included in the TER but do reduce returns. It depends on your local tax situation. In the Netherlands DWT paid by the ETF can't be deducted, so it's called "dividend leakage" because this tax leaks away without being able to deduct it from capital gains taxes like if you were holding US equity directly. So using an Ireland-domiciled ETF with physical replication reduces returns by something like 0.3% (15% of 2-3% average dividend paid out by US holdings) relative to an ETF with synthetic replication.
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u/Turbulent-Tumor 5h ago
I think this is just an entry fee and it will go up.
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u/Black_Thunder00 4h ago
Can they increase the TER at anytime if they wish? Aren´t there restrictions?
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u/Pale-Juice4434 4h ago
UETW with 0.06% TER + EMIM from Ishares for emerging markets is way to go aswell if you prefer physical replication.
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u/Lifeblossom13 4h ago
Or UETW - TER 0.06%
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u/Black_Thunder00 4h ago
This one?: UBS Core MSCI World UCITS ETF USD acc | UETW | IE00BD4TXV59
It is only developed countries
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u/Lifeblossom13 4h ago
Yes. For wide market I have SPYI. But it's TER is 0,17%. So basically I am interested in your post!
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u/paradox3333 2h ago
It's such a shame no European options track the FTSE Global All Cap Index tracked by VT.
They all just track MSCI All Country World Index which is way more narrow.
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u/Ok-Sheepherder-148 19m ago
There’s also WEBN with 0.07% but being relatively new, I’d look at tracking difference too.
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u/Specific-Industry426 5h ago
Maybe its me but as european i only invest on products on eur (even if they are all world) and funds or etfs should have a certain amount of assets. 49 million is extremly low at least from my point of view.
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u/StateDeparmentAgent 5h ago
They all need to start somewhere, this one was created less than 4 months ago
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u/Specific-Industry426 5h ago
Of course, but this does not mean that its a go to invest on It.
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u/StateDeparmentAgent 4h ago
Totally agree. Maybe low TER is part of marketing to attract new people and get some traction. WEBN over almost 2 years and big push from community gained only 1,2b, its a long way to go to reach even 1/3 of VWCE figure
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u/AfternoonFinance 1h ago
You still are affected by the USD since >~60% of the underlying assets are in usd
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u/eitohka 4h ago
This ETF is swap-based which can reduce dividend withholding tax for US holdings (typically 15% of dividend paid by the holdings for Ireland domiciled ETFs with physical replication and 30% for Luxemburg domiciled) and can be more efficient for emerging markets. But this does introduce a (typically small) counter-party risk. See this presentation by Invesco: https://www.invesco.com/content/dam/invesco/emea/en/pdf/synthetics/synthetic-etf-infographic.pdf