Minimize brokerage fees for Ireland domiciled ETFs

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pt32
Posts: 75
Joined: Fri Dec 19, 2014 11:29 am

Minimize brokerage fees for Ireland domiciled ETFs

Post by pt32 »

Hello, purchasing Ireland domiciled ETFs on Interactive Brokers (on EU exchanges) comes with a 0.0625% broker (trading) fee.

1. Are any Ireland domiciled ETFs listed on US exchanges (where the trading fees are about 10x lower)?

2. Are there any brokers who have lower trading fees than IB for EU markets?

3. Any other idea how to minimize the trading fee?
oogZoo
Posts: 102
Joined: Mon Sep 02, 2019 12:05 pm

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by oogZoo »

Degiro has some commission free ETFs. Transactions are free of charge under certain conditions.

Check the details on the Degiro site of your country (or for Finland here https://www.degiro.fi/commission-free-etfs - the list or the rules may depend on your country). Note the rules in "Fair use policy" section. For example Vanguard FTSE All-World UCITS ETF is on the list (distributing variant at Euronext Amsterdam and accumulating variant at Xetra).
helloyou
Posts: 222
Joined: Sun Apr 26, 2020 6:09 am

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by helloyou »

Chasing lower broker fees is not really important.

IB is already very cheap while being relatively safe. Maybe some other brokers are a few basis points cheaper but would bear a much higher risk. How do you think those brokerages make money if they offer free stock/etf trading? They make money out of margin/p2p trading hence the higher counterparty risk. Would you feel safe the day your cheap broker with little to no insurance coverage fails as all the margin calls are called the day of a crash? I would stick with interactive brokers or large retail banks to hold ETF. I’d just sleep much better at night than saving a few hundredth of a percentage.
IcedTea
Posts: 92
Joined: Thu Mar 12, 2020 4:12 am

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by IcedTea »

Interesting point raised by helloyou.

Can Degiro be considered a safe broker?

Thanks
Last edited by IcedTea on Thu Aug 05, 2021 4:45 pm, edited 1 time in total.
Topic Author
pt32
Posts: 75
Joined: Fri Dec 19, 2014 11:29 am

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by pt32 »

helloyou wrote: Mon Jul 26, 2021 9:43 pm Chasing lower broker fees is not really important.

IB is already very cheap while being relatively safe. Maybe some other brokers are a few basis points cheaper but would bear a much higher risk. How do you think those brokerages make money if they offer free stock/etf trading? They make money out of margin/p2p trading hence the higher counterparty risk. Would you feel safe the day your cheap broker with little to no insurance coverage fails as all the margin calls are called the day of a crash? I would stick with interactive brokers or large retail banks to hold ETF. I’d just sleep much better at night than saving a few hundredth of a percentage.
How can I lose my equity (ETFs, stocks) if the broker goes bankrupt? They are in a separate custody account held by a separate entity, right?
jw50
Posts: 67
Joined: Thu Jul 27, 2017 2:00 pm

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by jw50 »

IB is among the cheapest broker around. IB pro is fairly transparent in how it charges (make a living).

Other brokers may appear to charge less by building their charges into an inferior price!
glorat
Posts: 1036
Joined: Thu Apr 18, 2019 2:17 am

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by glorat »

pt32 wrote: Thu Jul 29, 2021 5:57 am
helloyou wrote: Mon Jul 26, 2021 9:43 pm Chasing lower broker fees is not really important.

IB is already very cheap while being relatively safe. Maybe some other brokers are a few basis points cheaper but would bear a much higher risk. How do you think those brokerages make money if they offer free stock/etf trading? They make money out of margin/p2p trading hence the higher counterparty risk. Would you feel safe the day your cheap broker with little to no insurance coverage fails as all the margin calls are called the day of a crash? I would stick with interactive brokers or large retail banks to hold ETF. I’d just sleep much better at night than saving a few hundredth of a percentage.
How can I lose my equity (ETFs, stocks) if the broker goes bankrupt? They are in a separate custody account held by a separate entity, right?
If your broker is perform lending of the equity you hold, I suspect weird things can happen if either the market crashes or your broker does. For that I reason, I use IB and disable securities lending. IB also offer the transparent option of allowing lending and giving you a portion of the income. Some smaller brokers tell you in their TOC that they will lend automatically and the broker keeps all the income.
actuallyxy
Posts: 67
Joined: Wed May 24, 2017 6:25 am

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by actuallyxy »

ETF transactions have a bid-ask spread. Choosing a broker that can provide a good execution may be more important than trying to get lowest fees possible.
AlohaJoe
Posts: 6609
Joined: Mon Nov 26, 2007 1:00 pm
Location: Saigon, Vietnam

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by AlohaJoe »

IcedTea wrote: Tue Jul 27, 2021 2:53 pm Interesting point raised by helloyou.

Can Degiro considered a safe broker?
IIRC, Degiro reserves the right to loan out all client securities, making you subject to rehypothecation risk.

I think trade execution quality is as important as the fee when we're talking about fees this low. How much price improvement does Degiro give you?
oogZoo
Posts: 102
Joined: Mon Sep 02, 2019 12:05 pm

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by oogZoo »

AlohaJoe wrote: Sat Jul 31, 2021 3:49 am IIRC, Degiro reserves the right to loan out all client securities, making you subject to rehypothecation risk.
Degiro customers can choose whether they want to participate in securities lending. Basic account allows lending and Custody account does not.
rhe
Posts: 138
Joined: Sun Feb 26, 2017 1:10 am

Re: Minimize brokerage fees for Ireland domiciled ETFs

Post by rhe »

actuallyxy wrote: Sat Jul 31, 2021 3:16 am ETF transactions have a bid-ask spread. Choosing a broker that can provide a good execution may be more important than trying to get lowest fees possible.
In fact, if you do enough trades the "transaction" column in one of the IB activity report tables starts to give an estimate of your average spread costs (I believe it is based off of the closing price on the day you trade, so is too noisy if you only have a few trades). I watched this for a while, and came to the conclusion that the spread was generally more important than the commissions.
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