5 ms·

Vanguard and Blackrock ETFs are the cheapest on the German market. Germans like the Vanguard FTSE All-world index fund. While Vanguard and Blackrock own a big

Vanguard and Blackrock ETFs are the cheapest on the German market. Germans like the Vanguard FTSE All-world index fund. While Vanguard and Blackrock own a big chunk of the DAX, what this presentation does not show is for whom do Vanguard, Blackrock, et. al manage these assets for? Is this just Germans buying American products that require American investors to buy German stocks?

imtringued 5y ago
Germany has a trade surplus with the US so Germans would end up buying American stocks.
- tut-urut-utut 5y ago
  Germany doesn't have a trade surplus with the US. That's the myth US government spreads regularly to justify protectionism. The surplus exists only because the biggest digital companies (Google, MS, IBM, FB, ...) are not counted for in the USA-German trade balance.
  - JumpCrisscross 5y ago
    > surplus exists only because the biggest digital companies (Google, MS, IBM, FB, ...) are not counted for in the USA-German trade balance Do these transactions result in uncounted dollars flowing back to the U.S.?
    - tut-urut-utut 5y ago
      > Do these transactions result in uncounted dollars flowing back to the U.S.? Yes, but not directly. Unless you count that all those profits are actually trade surplus with Ireland, Luxembourg and other tax heavens, and not with Germany, France and other countries where those "digital goods and services" are sold.
      - merb 5y ago
        well isn't most money these internet companies do, put into offshore markets, so neither positive for the us and the eu?
  - sedeki 5y ago
    Why is that?
  - adventured 5y ago
    There was a $67 billion trade gap, $60b to $127b, between the US and Germany for 2019. The biggest US digital/tech companies aren't remotely coming close to having enough unaccounted for business in Germany that could fill in $67 billion.
allendoerfer 5y ago
> Vanguard and Blackrock ETFs are the cheapest on the German market. Lyxor is often cheaper. By Lyxor buying Comstage and Amundi buying Lyxor, there is a big European champion now.
- 2ion 5y ago
  Besides size and volatily (dissolution, mergers of ETF generating unfavourable tax events), most ETF by European providers are swap-based. This means that they are cheaper/slightly better performing according to their swap risk premium, but some folks they like to stick with non-swap ETF. Finally, age --- Blackrock, Invesco etc have some of the largest and oldest ETF in the Euroepan/German market on some of the most desireable indices, and so it comes that people might not think of collecting 10 ETF on the same index but stick with one, esp. since for tax optimisation, FIFO purchase/sell order can be circumvented by collecting the same security in distinct depots.
  - ivanche 5y ago
    While it's true that a lot of ETFs available in Europe are swap-based, I think it's not "most". According to [1], there are 798 ETFs using full replication, 510 using sampling and 327 are swap-based. [1] https://www.justetf.com/de-en/find-etf.html?groupField=none&sortField=ter&sortOrder=asc https://www.justetf.com/de-en/find-etf.html?groupField=none&...
  - allendoerfer 5y ago
    > Besides size and volatily (dissolution, mergers of ETF generating unfavourable tax events), most ETF by European providers are swap-based. The older ones are swap-based, the new ones are not. iShares has the biggest offering. Lyxor and Xtrackers are often cheaper for very popular indices. Vanguard is just entering the market. I think it is a very healthy competition and TERs are constantly going down.

imtringued 5y ago

Germany has a trade surplus with the US so Germans would end up buying American stocks.

tut-urut-utut 5y ago
Germany doesn't have a trade surplus with the US. That's the myth US government spreads regularly to justify protectionism. The surplus exists only because the biggest digital companies (Google, MS, IBM, FB, ...) are not counted for in the USA-German trade balance.
- JumpCrisscross 5y ago
  > surplus exists only because the biggest digital companies (Google, MS, IBM, FB, ...) are not counted for in the USA-German trade balance Do these transactions result in uncounted dollars flowing back to the U.S.?
  - tut-urut-utut 5y ago
    > Do these transactions result in uncounted dollars flowing back to the U.S.? Yes, but not directly. Unless you count that all those profits are actually trade surplus with Ireland, Luxembourg and other tax heavens, and not with Germany, France and other countries where those "digital goods and services" are sold.
    - merb 5y ago
      well isn't most money these internet companies do, put into offshore markets, so neither positive for the us and the eu?
- sedeki 5y ago
  Why is that?
- adventured 5y ago
  There was a $67 billion trade gap, $60b to $127b, between the US and Germany for 2019. The biggest US digital/tech companies aren't remotely coming close to having enough unaccounted for business in Germany that could fill in $67 billion.

allendoerfer 5y ago

> Vanguard and Blackrock ETFs are the cheapest on the German market. Lyxor is often cheaper. By Lyxor buying Comstage and Amundi buying Lyxor, there is a big European champion now.

2ion 5y ago
Besides size and volatily (dissolution, mergers of ETF generating unfavourable tax events), most ETF by European providers are swap-based. This means that they are cheaper/slightly better performing according to their swap risk premium, but some folks they like to stick with non-swap ETF. Finally, age --- Blackrock, Invesco etc have some of the largest and oldest ETF in the Euroepan/German market on some of the most desireable indices, and so it comes that people might not think of collecting 10 ETF on the same index but stick with one, esp. since for tax optimisation, FIFO purchase/sell order can be circumvented by collecting the same security in distinct depots.
- ivanche 5y ago
  While it's true that a lot of ETFs available in Europe are swap-based, I think it's not "most". According to [1], there are 798 ETFs using full replication, 510 using sampling and 327 are swap-based. [1] https://www.justetf.com/de-en/find-etf.html?groupField=none&sortField=ter&sortOrder=asc https://www.justetf.com/de-en/find-etf.html?groupField=none&...
- allendoerfer 5y ago
  > Besides size and volatily (dissolution, mergers of ETF generating unfavourable tax events), most ETF by European providers are swap-based. The older ones are swap-based, the new ones are not. iShares has the biggest offering. Lyxor and Xtrackers are often cheaper for very popular indices. Vanguard is just entering the market. I think it is a very healthy competition and TERs are constantly going down.