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I noticed that some funds are available under different ISINs.

For example the HSBC FTSE EPRA NAREIT DEVELOPED UCITS ETF:

IE00B5L01S80
DE000A1JXC78

When looking them up I can't identify real differences - just perhaps that (at least) at some stock exchanges just one of them is traded.

So, are these ISINs just aliases? How can I see that?

(I assume there are other cases where there are real differences - e.g. whether dividends are reinvested or not.)

Are there any advantages of buying one over the other?

What is the motivation for a bank like HSBC to create multiple ISINs for a fund?

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It is mainly about the exchange it's trading on and the trading currency.

For the ETF you link, there are actually 3 variants:

  • IE00B5L01S80 traded on the LSE in GBP under SEDOL B5L01S8.
  • IE00B5L01S80 traded on the LSE in USD under SEDOL B3LFHB4.
  • DE000A1JXC78 traded on Deutsche Borse in EUR under SEDOL BDC7PY8.

Generally which one you'd buy is dictated by which exchange you're trading on and what currency you're using to trade there, but apart from that the assets represented by the ETF and their performance in the underlying (not the trading) currency should be identical.

Distributing and non-distributing versions (or things like hedged/unhedged) of an ETF would be completely different ETFs.

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  • Ok, makes sense. There are also regional stock exchanges where both ISINs are traded - e.g. Düsseldorf, Germany. It's kind of confusing that the Düsseldorf exchange lists USD for both (as funds currency) - while the rates are listed in EUR for both. And orders with your retail bank are also settled in EUR, for both. – maxschlepzig Apr 18 '19 at 8:03
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A reason for having 2 ISINs is to use different Central Securities Depositaries (CSDs) for collective safe custody of the securities.

In the above example this would be Clearstream (for DE000A1JXC78) and probably Euroclear (for IE00B5L01S80).

Thus, in this model, if you are located in Germany and buy the DE version then you have securities with a domestic issuance structure whereas with the IE version you have an international issuance structure.

Perhaps for some investors this makes a difference as the domestic issuance structure is perhaps more robust in times of a crisis.

Incidentally, effective 2020-03-23, HSBC switched all their ETFs from the multiple CSD model to an International Central Securities Depositary (ICSD) model. Meaning that now all the DE* ISIN versions are gone and the holt DE* securities are automatically exchanged 1:1 to the corresponding IE* counterparts.

A bit of rationale from the HSBC 2019-11-18 'Change of share settlement structure' announcement:

Trading and settling participating shares under this [current CSD] structure involves moving the participating shares between various CSDs, which is complex, costly and inefficient.

The directors of the Company are of the view that the International Central Securities Depositary (“ICSD”) settlement model provides a more streamlined centralised settlement structure which they expect will result in improved liquidity and spreads for investors and will reduce risk in the settlement process.

Converting the settlement model of the shares of the sub-funds of the Company to the ICSD model will also bring all of the Company’s sub-funds into one consistent settlement structure which is expected to make navigating the settlement structures for the sub-funds more straightforward. See also:

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