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Fund domicile: Luxembourg vs Ireland

Hi Community, I am hesitating between the following two ETFs $LCUW (-0.48%) and $MWRD (-0.52%) to finally replace my savings plan on the Uniglobal $U1IH (+0.28%) savings plan.

Both ETFs track the MSCI World and are issued by Amundi, but one is domiciled in Ireland and the other in Luxembourg.

Should I even be interested in this? If so, why?

Edit: I have just found this article from @Dividendenopi (thanks for that!) https://getqu.in/qTHc5O/. Regardless, I'm still interested in the above question ;)

Thank you,

Your Brokémon

13 Comments

Alex@Divy

Yes, it makes a difference where the fund is domiciled, especially for US equities. Ireland's tax treaty is much more favorable for physically replicating ETFs than in other European countries. I have picked out a link for you:

https://www.justetf.com/de/news/etf/us-quellensteuer-sparen-mit-den-richtigen-etfs.html

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Brokémon@Brokemon

@Divy Thank you!
Shouldn't the two linked ETFs then have different chart performances? At least according to the article this should be noticeable in the chart. Or am I misunderstanding this?

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Alex@Divy

Yes, that's right. If performance is measured according to the same criteria, this becomes noticeable over time. If you compare all ETFs on the msci world, for example, they also have different performance (of course also due to TER, differences in tracking, etc.), even though they track the same index.

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Alex@Divy

When comparing ETFs over 3 years, for example, there is a difference of around 2 percent between the best and worst performance:

https://www.justetf.com/de/how-to/msci-world-etfs.html

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Brokémon@Brokemon

@Divy Thanks for the explanation, Alex! Very helpful! In this case, however, the location seems to have at most a tiny influence on the performance.

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Alex@Divy

For me, this is just one criterion among many when I choose an ETF. Performance and costs, for example, are much more important to me.

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Andreas M.@thor88

@Divy Tax is also important but first look at the ETF cost then tax.

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Dominik@Dominik_76

For US equities and physically replicated Ireland due to tax benefits

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Dividendenopi👴@Dividendenopi

As @Divy rightly said, one vote from me for Ireland. And one against Aumundi. I also had an ETF on the Russell 2000 from them, the emphasis is on had.

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