what country to buy etf

nasher

Registered User
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i want to buy etf's on dbx trackers does it matter wheather you buy them in a eurozone country ie euro for euro or through the uk sterling /euro also i was looking at some etfs that were dollar based to purchase through the uk euro /sterling /dollar i am just a bit confused about the currency issue if it makes any difference at all.i understand that there is currency risk with the etf's if they are in another currency.
thanks
 
It does make a serious difference if you have to pay the commission for currency exchanges. It seems that the values in foreign currencies are adjusted with the change of market rates. So you save the commissions if you buy the same etfs offered in European markets by the same institution. But there aren't really currency risks due to the adjustement.

Some etfs seem to have higher spreads between bid and offer and lower volume, which is probably a bad sign. I held ishares S&P tracker and wasn't convinced by their tracking precision, there might be some hidden costs dilluting the performance.
 
As for the country to buy, I've found Paris Stock Exchange for Lyxor/EasyETF/Amundi and Amsterdam for Ishares ETFs.
 
thanks for that i will look at those websites and see what they are offering i looked at the dbx trackers website but obviously it is in german and am having trouble navigating around it thanks again.
 
is it just me or is there a real lack of clarity wrt how various brokers handle currency conversion issue wrt to ETFs. Maybe I'm just not looking in the right areas for it.
 
is it just me or is there a real lack of clarity wrt how various brokers handle currency conversion issue wrt to ETFs. Maybe I'm just not looking in the right areas for it.

I can only speak for my broker, where the currency conversion is not related to ETFs or any equity at all. I can change Euros in Dollars first and buy ETFs in Dollars or can do it in one step, the commission is the same. For TD Waterhouse it is 1.75%.
 
On the currency exchange rate. Only 20 euros to buy the ETF plus, as always with shares, there is a spread between the offer and the bid. I'd say it shouldn't be more than 0.5%. With some ETFs it is too large, I would stay away from them.
 
In these situations, one theoretical risk to beware of is currency hedging.

Some ETFs sold in a different currency, to the area they are tracking, may be more likely to have currency hedging built into them, which you likely do not want.

e.g. if a european tracking etf is sold in USD (and targeted for US investors), there is a chance the ETF hedge's USD, to ensure a US investor's return is not affected by changes in USD EURO Foreign exchange.
 
Is Paris Stock Exchange for Lyxor/EasyETF/Amundi and Amsterdam for Ishares ETFs are best?
 
Is Paris Stock Exchange for Lyxor/EasyETF/Amundi and Amsterdam for Ishares ETFs are best?

How do you make this make sense ?? Are yoy advertising a particular broker ?
ETFs are a collection of equities in particular markets. Therefore IMO it shouldn't really matter where the purchase is made.
 
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