5

I am planning to invest in Vanguard Index Funds while living/working in Germany, but only interested in specific ones (see below). But I cannot seem to find them via brokers that I usually do my tradings with, namely DKB, ING-Diba. I am currently looking at (as examples):

  • Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
  • Vanguard Information Technology Index Fund ETF (VGT)
  • etc.

Also checked a few others like Consorsbank that was recommended by a friend due to low fees, also they are not available. eToro seems to offer some of these funds, but I have never traded at eToro, and STILL missing somes like VTSAX I am interested in!

Questions:

  • Curious to know why is that? Still surprised to see banks like DKB are missing a large number of these matching index funds (perhaps there is a regularity reason!!) Aren't those funds regulated to be traded in EU (Germany)? Or maybe there are ways that I failed to find them there?
  • How about a reliable broker that offers most of Vanguard Index Funds to be traded within Germany? Any experience trading at eToro? I'm personally hesitant to use such platforms due to security reasons (say I am old-fashion or too conservative).
3
  • 4
    The site justetf.com allows you to search funds that are available in the EU. For many of its US products, Vanguard does offer an EU equivalent.
    – amon
    Dec 17 '20 at 18:08
  • Thanks for the comment, it is very good hint. But curious, how to find the Vanguard EU equivalent ones via justetf.com or elsewhere? For example VTSAX it is not even in justetf.com, and when I google little luck. Also found services like similarstocks.com, but not exclusive for EU. In short, I couldn't find a platform to match those equivalent ones. E.g. how to find iShares S&P 500 Information Technology Sector UCITS ETF USD that was mentioned in the answer? Dec 18 '20 at 13:29
  • 1
    VTSAX is not shown because it's not available in the EU. Instead, search for funds that track the same index, or track the same country/sector/etc.
    – amon
    Dec 18 '20 at 14:16
9

Curious to know why is that?

Generally each region in the world has it's own regulations and specific financial products. The VTSAX is an American product. You also can't buy it in Australia or even in Canada.

So to a large extent it really boils down to regulations. German (or generally EU) brokers are only allowed to offer UCITS regulated funds to their retail customers. Furthermore the EU Directive 2014/65/EU massively restricted the investable universe for retail customers in the name of consumer protection.

You may bypass this regulations by becoming a customer of an international broker, but the really serious downside with that route as a German citizen (which you are?) lies in complicating your tax return. While german brokers handle all tax issues and withhold the appropiate amounts for their retail customers directly, as a customer of an international broker you must handle the tax completely yourself.

eToro is one of those international brokers, quoting from their help page "Do I need to pay taxes on my trades?"

It is our clients’ responsibility to calculate and pay any applicable taxes in their country or countries of tax residence.

Especially with funds, that really is a can of worms, which I wouldn't advise you to open. Just in 2018 Germany passed a law (InvStG), which massively complicates the tax handling of accumulating investment funds. That's really no fun to do by yourself. :-)

How about a reliable broker that offers most of Vanguard Index Funds to be traded within Germany?

The international divisions of Vanguard decide by themself, which funds are interesting for their local markets. Instead of searching a different broker, you may be better of finding alternative funds:


On a general note:

If I recall correctly the international Vanguard divisions are for profit organizations and not organized in the same way as in the US, were the fund shareholders are the owners of Vanguard (making it work like some kind of cooperative, which makes Vanguard so special in the US market).

It somewhat has a downside, if you get all your financial literacy from US books/online forums, while not being located in the US. Literally all the products that get talked about aren't available to you, also a lot of the concepts (especially in regards to retirement strategies) don't apply to you, as the tax regime is totally different.

5
  • 1
    +1 Thanks a lot for a great answer, that is all I needed to know. It was quite hard to find them by browsing from here and there. Tax is a pain, and you clarified it for me, I am better off that being automatically taken care of!! Downside of leaving in EU, while all the fun elsewhere. Anyways, I just analyzed briefly iShares S&P 500 Information Technology Sector UCITS ETF USD you mentioned, it is super solid and pretty much matches to the Vanguard one (a similar portfolio composition), and my back DKB conveniently offers it. Maybe it is really not about where you live, more what to find. Dec 17 '20 at 14:19
  • One more thing. It was commented above that justeft.com would enable one to find those products existing in EU. But as I said, there I could not identify easily the best matching products in EU. How did you come up with iShares S&P 500 Information Technology Sector UCITS ETF USD for example? Any search platform or random browsing or recommendations? Thanks for your input. Dec 18 '20 at 13:31
  • @TwinPenguins yeah, justetf is pretty neat. I added a separate answer to detail that a bit ...
    – s1lv3r
    Dec 21 '20 at 12:32
  • That is neat, thanks. I already found that filter to identify the ones are in German stock exchanges, besides a way to find Vanguard equivalent ones. Dec 21 '20 at 15:33
  • 1
    @TwinPenguins Glad to hear that you already figured it out by yourself. Sorry, for the late reply to your comment btw, but I'm not "working" on weekends. 🙂🙂
    – s1lv3r
    Dec 21 '20 at 15:59
2

Any search platform or random browsing or recommendations?

Justetf.com is indeed a good recommendation as a ETF search plattform. In most cases it will be superior to your brokers own search function.

If you choose your location in the topbar. The page will automatically preselect the appropriate trading locations: justetf search

In this case it preselected XETRA (the trading system of the Frankfurt Stock Exchange) and the Stuttgart stock exchange.

Those both result in 1559 investable ETFs in Germany, which you can filter further through the filternavigation on the left side, or through keyword-search.

I would dare to say, that with almost all German retail brokers you will have access to most of those, either directly or through a market maker.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.