Minimize brokerage fees for Ireland domiciled ETFs
Minimize brokerage fees for Ireland domiciled ETFs
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?
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?
Re: Minimize brokerage fees for Ireland domiciled ETFs
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).
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).
Re: Minimize brokerage fees for Ireland domiciled ETFs
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.
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.
Re: Minimize brokerage fees for Ireland domiciled ETFs
Interesting point raised by helloyou.
Can Degiro be considered a safe broker?
Thanks
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.
Re: Minimize brokerage fees for Ireland domiciled ETFs
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?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.
Re: Minimize brokerage fees for Ireland domiciled ETFs
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!
Other brokers may appear to charge less by building their charges into an inferior price!
Re: Minimize brokerage fees for Ireland domiciled ETFs
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.pt32 wrote: ↑Thu Jul 29, 2021 5:57 amHow 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?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.
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Re: Minimize brokerage fees for Ireland domiciled ETFs
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.
Re: Minimize brokerage fees for Ireland domiciled ETFs
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?
Re: Minimize brokerage fees for Ireland domiciled ETFs
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.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.