Which ETFs for Euro STOXX 50 and S&P 500?

gol

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This is my first post on askaboutmoney. Looks like a great forum!

I am searching for ETFs to invest some significant funds into as a multiyear investment. I have recently opened an account in Keytrade so that I can buy stocks in Euros on the European exchanges at low cost.

I am searching for 2 ETF types to start with...

One tracking large cap equities in the Eurozone ... like EuroSTOXX 50
One tracking large cap equities in the USA ... like the S&P 500

I am looking at various offerings from iShares, Lyxor, DB, EasyETF etc but am unsure which ones are the best value in terms of total fees and have to most secure foundations (I say this because I am concerns that iShares ETFs assets are held by Bank of Ireland in Dublin)

Could anyway recommend 2 European-based ETFs tracking the the above markets and suggest which markets to buy them on?

Thanks!
 
I use iShares EUN.L for EuroStoxx50 ETF and SPY.US for S&P 500. Costs for all these ETFs are very low and you are better off worrying about which ETFs or assets classes you invest in than nit picking over a 0.3 v 0.4% TER (total expense ratio or charges). The reference to Bank of Ireland does not mean that they hold the shares, it only means that the ETF company is domiciled in Ireland. The security of Barclays is more relevant and they have stated that the ETFs and shares held therein are ringfenced from their other assets.
 
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I agree with Janman07. You are better worrying about asset allocation than TERs. Also, as a buy and hold (but not a ‘buy and forget’) investor I rate security highly, so I’ve restricted my choice to ETFs that can be settled in the CREST system (so the ETFs are in my name, I get correspondence directly from iShares, iShares pays divs directly into my a/c, etc.).

On a related point, the S&P covers 500 companies, but euro investors typically go for the Eurostoxx50 that I would say is not sufficiently diversified. So I’ve gone for IEUX.L that gives coverage to about 400 non-sterling European stocks (it includes some SE and CH as well as EUR equities).
 
Can anyone give information on low-cost US/Vanguard Index Mutual Funds that cover S&P500 and EuroStoxx. Are these funds a good investment for 2009 ?
 
Be careful to know where the ETF is domiciled for Tax. I have come across individuals with Channel Island domiciled ETFs and they have been stuffed by Revenue....
 
... so I’ve restricted my choice to ETFs that can be settled in the CREST system (so the ETFs are in my name, I get correspondence directly from iShares, iShares pays divs directly into my a/c, etc.)...

PMU would you mind if I asked how you opened the crest account and who your broker is. I'm with NIB and I have to say I feel a bit uncomfortable with their custody account and it's 20K maximum protection on securities held.
I also like the idea of getting all correspondance directly.

Can one open a crest account directly or does it have to be done through a broker?

Thks,
Bogle
 
PMU would you mind if I asked how you opened the crest account and who your broker is.

I filled in the necessary form and returned it to [FONT=&quot]Campbell O’Connor, who I selected purely on the basis of other posts I had read on AAM. [Also, I dropped in and visited them for a chat, had my questions answered, etc. before I opened the account.] [/FONT][FONT=&quot]
Note: they're not on-line, so you phone up and place orders,etc.[/FONT]
[FONT=&quot]
[/FONT]
Can one open a crest account directly or does it have to be done through a broker?

[FONT=&quot]AFAIK, you need to be ‘sponsored’ by e.g. a stockbroker (i.e. someone who has an admission agreement with CREST).
[/FONT]
 
I agree with Janman07. You are better worrying about asset allocation than TERs. Also, as a buy and hold (but not a ‘buy and forget’) investor I rate security highly, so I’ve restricted my choice to ETFs that can be settled in the CREST system (so the ETFs are in my name, I get correspondence directly from iShares, iShares pays divs directly into my a/c, etc.).

On a related point, the S&P covers 500 companies, but euro investors typically go for the Eurostoxx50 that I would say is not sufficiently diversified. So I’ve gone for IEUX.L that gives coverage to about 400 non-sterling European stocks (it includes some SE and CH as well as EUR equities).

Thanks for this advice; I will consider your points carefully.

In looking at ETFs, I have used the following considerations to making comparisons

- What the ETF owns (or as you put it asset allocation)
- enough liquidity (i.e. higher total fund assets) meaning lower bid/ask spreads
- TOTAL costs: not only TER but also replication methodology as tracking errors can add to costs
- Evaluation of the provider (and in the case of an ETF using synthetic replication, also the swap counterparty)

Based on this, it seems that the most cost-effective way of investing in the S&P 500 is through SPY. There is little point in buying a comparable product from another provider as you are just buying higher costs and nothing more. SPY charges just 0.10% TER and no product from a European vendor comes close to that.

The most attractive product for Euro STOXX 50 seems to be the db x-tracker (XES:FP) which has a very low TER of 0.15% and it uses synthetic replication thus eliminating tracking error which annualised can add additional cost (0.2 - 0.3% in the case of some iShares products I looked at)

I will look at IEUX.L as a means to having something to track 'broader' Europe minus UK.

Any suggestions for additional core ETFs to start adding a bit more diversity in the current climate ... Emerging Markets, New Energy etc.?

Any ideas welcome...
 
Be careful to know where the ETF is domiciled for Tax. I have come across individuals with Channel Island domiciled ETFs and they have been stuffed by Revenue....

For tax efficiency, where should the etf be domiciled? Thanks.
 
The advice I have been given by people who know their way around ETFs is to stick with those domiciled in Europe -quite a lot are domiciled here in Dublin so they would appear the safest bet in terms of minimal tax complications.

Going back to earlier posts on this thread the debate has been raging in the last year or so between physical and swap-based ETFs.While extensive use of stock-lending within physically-backed ETFs may mean that hidden counterparty risks arise I am coming to the view that they are somewhat safer than swap-based.

I might be less wary of swap-based if/when regulators (or market pressure) causes providers to desist from doing the swaps exclusively with one related entity.
 
For tax efficiency, where should the etf be domiciled? Thanks.

Did you manage to get any extra information on this Shaz?

From what I have read, where the fund is domiciled can not only affect personal taxation, but also the taxation within the fund itself. So a bad choice could result in a double whammy.
 
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