In the increasingly globalized financial world, choosing the right ETF provider can be a challenging decision. While international providers often boast reputable brands and impressive product portfolios, there are compelling reasons to consider domestic ETF providers. These considerations range from supporting the local economy to alignment with personal values and potential cost benefits.
A comment from me as to why $AMUN (-0,84 %) , $HSBA (+0,46 %) or $DWS (+2,56 %) should sometimes be the better choice.
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1. Supporting the local economy
The first and perhaps most obvious reason to choose a local ETF provider is to support the local economy. By investing in ETFs managed by local providers, investors are not only supporting the growth and stability of domestic financial markets, but also local employment and innovation. Any domestic provider that can compete with international giants helps to strengthen the financial center and secure jobs. In addition, the administrative costs that investors pay flow directly back into the domestic economy instead of flowing abroad.
2. value-oriented investment decisions
Another aspect that is often overlooked is the value orientation of the investment strategy. Domestic ETF providers generally have a better feel for the cultural and economic characteristics of their country. They are more closely networked with local markets and companies and can offer products that are better tailored to the needs and values of domestic investors. This is often reflected in a greater consideration of sustainability criteria, social responsibility and governance principles that are important to local investors.
3. cost savings with comparable quality
Another compelling reason to choose domestic ETF providers is the potential cost benefits. International providers often have high marketing and distribution budgets, which is why domestic providers can often offer their products at a lower cost. Management fees and other costs are often lower as they do not have the same high overhead costs as international providers. In addition, the differences in quality are often minimal for products that are comparable in structure and investment objective. Domestic ETFs therefore often offer excellent value for money.
Potential disadvantages and trade-offs
Of course, there are also reasons that could speak against a domestic ETF provider. One example is a higher tracking error, while other investors may prefer ETFs based in Ireland or Luxembourg to take advantage of tax benefits. Brands such as BlackRock or Vanguard attract many investors as they offer large fund volumes and a broad product range.
However, it should be noted that the differences in quality between domestic and international providers are small, especially for financial products such as ETFs, which are often standardized and transparent.
Addendum
Of course, you shouldn't put yourself in a worse position just to choose a domestic product.
Addendum 2
By "domestic" here we mean Europe. It's not just about ETF domicile, but about the asset managers.
Cheers!
