Hi @jpc, thanks for your feedback!
My understanding is that the UK and Luxembourg signed a double taxation treaty last year and the withholding tax is now 15%, the same as it is for Ireland.
If you have different information I’d be keen to see it because it would make PRIW less exciting!
According to https://www.etfstream.com/articles/ireland-extends-leading-position-over-luxembourg-in-european-etf-market and Easy, But Boring Money - How To Reduce Withholding Tax? Luxembourg US withholding is 30%
@jpc, this explains your point perfectly! Thank you.
The investment world is a spiders web - appreciate your help.
Need to do some math now to work out the expenses benefit vs the withholding tax…
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Vanguard FTSE Developed World UCITS ETF
Stock market ticker: VEVE/VHVG
Total expense ratio: 0.12%
What does it invest in?
The Vanguard FTSE Developed World UCITS ETF (VEVE/VHVG) is designed to give investors exposure to a broad range of developed markets across the globe. This ETF tracks the performance of the FTSE Developed Index, which includes large and mid-cap companies from developed economies worldwide. The index encompasses a diverse array of industries and sectors, making it a comprehensive representation of the developed world’s equity markets.
VEVE/VHVG’s underlying index does not focus on specific themes or disruptive technologies, but rather seeks to capture the overall performance of developed world equities. As such, it includes companies from sectors like technology, healthcare, finance, consumer goods, and more.
One notable feature of VEVE/VHVG is its relatively low total expense ratio (TER) of 0.12% p.a. – in short, it’s a cost-efficient fund. This low expense ratio may make VEVE/VHVG an attractive option for investors looking for cost-effective exposure to developed world equities.
Why would you consider it for your portfolio?
Investors looking for broad exposure to developed markets around the world may find VEVE/VHVG appealing. This ETF offers a simple and efficient way to invest in a wide range of companies from developed economies, providing diversification benefits to your portfolio.
The low expense ratio of 0.12% p.a. is a significant advantage, as it minimises the costs associated with holding the ETF. Lower expenses mean that a larger portion of your investment returns remain in your pocket, potentially enhancing long-term returns.
Furthermore, VEVE/VHVG’s passive investment approach involves replicating the performance of the FTSE Developed Index. By not targeting any specific areas, it offers exposure to various industries and sectors, allowing investors to benefit from the overall growth of developed economies.
Does it pay an income?
Vanguard FTSE Developed World primarily focuses on capital appreciation rather than generating immediate income for investors. However, it is available in both distributing (VEVE) or accumulating (VHVG) forms. This gives investors the choice of reinvesting any dividends to accumulate over time, or having them paid out as an income.
You can invest in Vanguard FTSE Developed World UCITS ETF (VEVE/VHVG) via InvestEngine’s commission-free DIY platform.
Is this ETF a part of your wider investment portfolio? If so, are you happy with it? Leave a comment below.
When investing, your capital is at risk.
Money Market Funds
This week, we’ll be taking a closer look at two of our popular money market ETFs available on our platform.
Lyxor Smart Cash and Xtrackers GBP Overnight Rate Swap
What is a money market fund?
Andy, our Head of Investments explains here.
Lyxor Smart Cash
Stockmarket ticker: CSH2
Total expense ratio: 0.07%
What does it invest in?
The Lyxor Smart Cash - UCITS ETF C-GBP aims to outperform the SONIA benchmark by generating short-term returns while minimising volatility. This UCITS-compliant ETF employs an actively managed approach, strategically distributing investments across diverse financial instruments and repurchase agreements. Investments are carefully chosen and overseen in a rigorously assessed, liquid environment. SONIA, the benchmark, reflects the dynamic overnight interest rate based on a weighted average of interbank transactions in the Pounds interbank market.
Why would you consider it for your portfolio?
Consider incorporating the Lyxor Smart Cash ETF into your portfolio for its unique features. This ETF aims for short-term returns above the SONIA benchmark, catering to a shorter investment horizon. With a focus on maintaining low volatility, it appeals to those seeking stability. The active management strategy allows it to adapt to market changes, and a diversified portfolio enhances adaptability and potential risk mitigation.
As an investor, benefit from exposure to a highly liquid investment traded on an exchange. This ETF, following Lyxor’s reputable standards, offers transparent and cost-effective access to the benchmark rate and strategy, making it a valuable asset for your investment portfolio.
Does it pay an income?
The Lyxor Smart Cash ETF is not designed to provide an income. Instead, the earnings generated by the ETF are accumulated, contributing to its overall value and potentially supporting its objective of achieving short-term returns beyond the SONIA benchmark rate.
You can invest in The Lyxor Smart Cash ETF via InvestEngine’s commission-free DIY platform.
Xtrackers GBP Overnight Rate Swap
Stockmarket ticker: XSTR
Total expense ratio: 0.15%
What does it invest in?
The Xtrackers GBP Overnight Rate Swap ETF, designed to meet UCITS compliance standards, aims to deliver short-term returns that surpass the benchmark rate, SONIA, all while maintaining an exceptionally low level of volatility. This ETF operates within an actively managed framework, strategically allocating its investments across a diversified spectrum of financial instruments and repurchase agreements. These investments are meticulously chosen and managed in a high-scrutiny environment, with continuous monitoring of liquidity levels.
SONIA, the ETF’s benchmark, represents a dynamic overnight interest rate, calculated as a weighted average of all interbank transactions involving overnight assets within the GBP interbank market.
Why would you consider it for your portfolio?
Incorporating the Xtrackers GBP Overnight Rate Swap ETF into your investment portfolio can be substantiated by its distinctive attributes. The ETF focuses on generating short-term returns that outperform the SONIA benchmark rate, offering potential benefits within a shorter investment horizon. Furthermore, its emphasis on maintaining exceptionally low volatility levels can be appealing to investors seeking stability and reduced risk exposure within their holdings.
As an investor, you gain the advantage of exposure to a highly liquid ETF. This ETF, upholding Xtrackers’ reputable standards, provides transparent and cost-effective access to the underlying benchmark rate and investment strategy, rendering it a valuable asset for your investment toolkit.
Does it pay an income?
The Xtrackers GBP Overnight Rate Swap ETF is a distributing ETF that pays out the income from its underlying holdings, rather than automatically reinvesting it (as with an accumulating ETF).
The current yield is 4.05% (as at 20/12/23).
You can invest in the Xtrackers GBP Overnight Rate Swap ETF through InvestEngine’s commission-free DIY platform.
Are these ETFs a part of your wider investment portfolio? If so, are you happy with them? Leave a comment below.
When investing, your capital is at risk.
WisdomTree Megatrends UCITS ETF
Stock Market ticker: WMGG
Total expense ratio: 0.50%
What does it invest in?
The WisdomTree Megatrends - UCITS ETF is structured as a UCITS compliant exchange-traded fund with the primary goal of capitalising on the enduring growth potential of Megatrends and associated themes, aiming for long-term capital appreciation. This ETF tracks the WisdomTree Global Megatrends Equity Index, strategically investing in global listed companies engaged in investment themes across various megatrends. These megatrends encompass social, demographic, technological, environmental, and geological shifts.
Why would you consider it for your portfolio?
Including the WisdomTree Megatrends ETF into your investment portfolio is substantiated by its distinctive attributes. The ETF is designed to capture the long-term growth potential of Megatrends, aligning with investors’ objectives for sustained capital appreciation. Its focus on global listed companies involved in key investment themes provides a diversified approach to tapping into transformative shifts across different sectors.
Employing an active management framework, this ETF adapts to evolving market conditions, positioning itself to capitalise on opportunities that align with its investment objectives.
The WisdomTree Megatrends ETF, in line with WisdomTree’s reputable standards, offers transparent and cost-effective access to the underlying global megatrends and investment strategy, making it a valuable asset for inclusion in your investment portfolio.
Does it pay an income?
The WisdomTree Megatrends ETF is not designed to provide regular income. Instead, the earnings generated by the ETF are accumulated, contributing to its overall value and potential to achieve long-term capital appreciation. Investors looking for a growth-oriented strategy aligned with the transformative shifts represented by global megatrends may find this ETF a compelling addition to their investment arsenal.
You can invest in the WisdomTree Megatrends ETF via InvestEngine’s commission-free DIY platform.
Is this ETF a part of your wider investment portfolio? If so, are you happy with it? Leave a comment below.
When investing, your capital is at risk.