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I'm considering to buy ETFs through IBKR, which seems to be a safe bet investment. The same ETF can be bought from different Stock Exchanges (different countries), one example is the Vanguard S&P 500 ETF.

Which factors should be considered to choose from which Stock Exchange to buy?

To put a little more context on this let's say I have money in a bank in China and I want to spend it in Europe 5 to 10 years from now to buy an apartment.

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    5 to 10 years is rather short to invest in an ETF securely, when you need the money to buy real estate Sep 25, 2021 at 10:02
  • Good to know! May I ask for an alternative?
    – ebepem
    Sep 25, 2021 at 10:12

1 Answer 1

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Which factors should be considered to choose from which Stock Exchange to buy?

There is no straightforward answer. Generally speaking, if exactly the same ETF is listed on many stock exchanges, you should buy the ETF wherever is most convenient for you. If there are differences in transaction fees, you may want to choose the place with the lowest transaction fees. If you require a currency conversion to buy the ETF, and the ETF is traded in multiple currencies, you may want to choose the currency that is most convenient for you. If there are major differences in trading volumes in the ETF between stock exchanges, you may want to buy on the stock exchange where it is most liquid.

In some cases, one may be able to substitute one ETF for another equivalent ETF in another market. For example, if there are three different ETFs that track the same market index, you may be open to the idea of substituting one for another. There are many ETFs that track the S&P 500 index. For example, SPDR S&P 500 ETF Trust (listed on NYSE Arca, Singapore Exchange, Tokyo Stock Exchange, etc), Vanguard S&P 500 ETF (listed on NYSE Arca), Vanguard S&P 500 UCITS ETF (listed on the London Stock Exchange, SIX Swiss Exchange, Deutsche Börse, etc.). All of these track the same market index, but differ slightly (look into their prospectus for details).

The same ETF can be bought from different Stock Exchanges (different countries), one example is the Vanguard S&P 500 ETF.

As far as I am aware, there is only one officially sanctioned listing of the Vanguard S&P 500 ETF. That is VOO listed on NYSE Arca. Although VOO also appears to be traded on the Mexico Stock Exchange, liquidity is likely to be low there, and transaction fees may be much higher.

A separate issue is whether or not you should buy VOO. If you are a non-resident of the US, and wish to invest in an S&P 500 index ETF, VOO may be disadvantageous for you, tax-wise. This is because US non-resident aliens are subject to a 30% tax on dividends (assuming no applicable tax treaty that would reduce the tax rate). If you are subject to a high US dividend tax rate, you should look into other S&P 500 index ETFs domiciled outside the USA. Most people seem to opt for Irish-domiciled S&P 500 index ETFs such as the ones traded in European countries (e.g. Vanguard S&P 500 UCITS ETF). The Bogleheads wiki is a good resource for learning about these issues. In particular, you may be interested in the Nonresident alien's ETF domicile decision table.

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  • Considering "people seem to opt for Irish-domiciled S&P 500 index ETFs", since when is Ireland a good place to invest? Should one expect it to be so for the next 5 or 10 years?
    – ebepem
    Sep 25, 2021 at 6:16
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    @ebepem In general, these Irish-domiciled ETFs do not invest in Ireland; they only using Ireland as a tax domicile to reduce taxes.
    – Flux
    Sep 25, 2021 at 6:20
  • Since when are they domiciled in Ireland? Should one expect them to be domiciled there in the next 5 to 10 years? Does this question matter?
    – ebepem
    Sep 25, 2021 at 6:20
  • @ebepem I don't know the answers to those questions. Please post a new question to get answers from others.
    – Flux
    Nov 14, 2021 at 13:57

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