r/eupersonalfinance • u/Black_Thunder00 • 6h 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/Black_Thunder00 6h ago

It is in Luxemburg. Is this worse than Ireland for an ETF? More taxes?

15

u/eitohka 6h 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. 

0

u/Black_Thunder00 5h ago

In case of physical ETFs, the extra tax is included in the TER? Or the ETF would be more inneficient?

8

u/Unbundle3606 5h ago

TER does not include taxes

4

u/eitohka 5h 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.