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Hi! I am looking at the different ETFs that were complied on one of the articles here on Seedly. Can anyone tell me if there is any difference buying from different markets on the same ETF?
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Chris
12 Feb 2021
Owner and Writer at Tortoisemoney.com
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Most of the time, when comparing the 'same ETF' on two markets, there are some main differences that people tend to look at. Taking the S&P 500 ETFs for example, from my article here:
Withholding tax - This is a key difference and also the reason why LSE ETFs are often recommended over their US counterparts. Withholding tax on dividends levied on LSE ETFs (CSPX, VUSA etc) are at 15% while in the US (VOO, IVV) have it at 30%.
Expense Ratio - For S&P 500 ETFs, US based ones tend to have lower expense ratios at 0.03% for most vs their LSE counterparts at 0.07% generally. However, comparing purely from a cost standpoint, the Withholding tax impact tends to be larger.
Liquidity - Liquidity could be a reason that people might still choose US ETFs over their LSE versions. US ETFs tend to be more liquid, though for huge ETFs such as S&P 500 ETFs, this is also a relatively small concern. However, for more 'obscure' ETFs, this might be a bigger concern as this might affect the bid-ask spread and your ability to sell your shares when you need to.
Broker Limitations - Due to your broker, you may also not have access to the LSE, so this might force people to choose US based ETFs over LSE ones.βββ