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Why do you want to invest in the European stock market specifically in the first place? There's nothing that keeps non-US citizens from investing in US market
by BjoernKW 7y ago
Why do you want to invest in the European stock market specifically in the first place?
There's nothing that keeps non-US citizens from investing in US market ETFs.
That said, European economies are quite diverse. There are ETFs for the European market as a whole (Euro Stoxx 50, for instance) but they tend to fare worse than their national counterparts.
In addition to simply investing in US ETFs you might consider investing in European ETFs that reflect strong national markets. However, investing in European markets probably requires more research and market knowledge than the fire-and-forget approach US-based ETFs are famous for.
National NASDAQ equivalents such as TECDAX might be interesting, too. Keep in mind, though that these typically are much more volatile than NASDAQ because these indices don't comprise tech giants such as Amazon or Apple but much smaller companies which often are unknown to the general public but in many cases still are market leaders in their respective categories. Therefore the risk higher is higher - but so is the potential return.
- scribu 7y ago> There's nothing that keeps non-US citizens from investing in US market ETFs. Actually, there is. Unless an ETF provider publishes key investor information documents in the format required by the EU, EU citizens are not allowed to buy those ETFs. Since 2018, I have a number of US ETFs that I can no longer buy. I have to search for alternative UCITS funds instead, which are neither as diverse nor as large.
- AlchemistCamp 7y agoThat's not a problem for non-US citizens in general. It's a problem the EU imposes upon its own citizens.
- AlchemistCamp 7y agoNothing in the parent comment was untrue.
- seppel 7y agoTo my knowledge, EU citizens are still allowed to buy those ETFs, but EU brokers are not allowed to sell them. This means you can open an account at a non-EU broker (e.g. in Switzerland) and still buy them. This is perfectly legal, although it is a bit more work taxwise.
- chvid 7y agoIt is outrageous that the eu is effectively blocking its citizens access to products like spyder snp500 etf which is a far cheaper and more liquid etf than what is offered on the European markets.
- seppel 7y agoI'm an EU citizen and I can buy, e.g, the iShares Core S&P 500 UCITS ETF (ISIN IE0031442068) which gives me access to the S&P 500 and is as cheap as it can get.
- chvid 7y agoThe spy etf has better liquidity and (probably) lower costs.
- pmyteh 7y agoMaybe the liquidity (though for a buy-and-hold retail investor the iShares has plenty) but the costs are comparably minuscule for both: <0.1% pa.
- seppel 7y agoThe iShares one is actually cheaper (TER of 0.07% vs. 0.09%) but it seems its tracking difference is worse (for the last years), so it seems the SPDR performs better. However, you can also buy the Vanguard S&P 500 UCITS ETF in Europe, which has also has a TER of 0.07% but an even better tracking difference than SPDR. I don't think liqudity is a problem for such huge funds.