JPMorgan American Investment Trust vs Vanguard S&P 500 ETF?| Which Exchange?| Which Broker

[bbonilla2]

Hey there,

I have a couple questions that I have been trying to work out and wanted to work out which is best?

Q1: Which is the best Jam vs Vanguard S&P 500?

JPMorgan American Investment Trust PLC

Pros

• 33% Tax

Cons

• Charges are apparently high for London Stock Exchange
• Currency risk

Degiro: LSE | JAM | GB00BKZGVH64 | GBX | CX

Vanguard S&P 500 UCITS ETF USD

TDG | VUAA | IE00BFMXXD54 | EUR | R

Pros:

• It's in Euro

Cons:

• ETF tax rate 41
• Forced to sell after 8 years

Q2: Which is the best stock exchange for Ireland?

• TDG
• EAM
• SWX
• LSE
• MIL
• TDG
• XET

Q3: Which is the best Broker?

I see a lot say these two:

• IBKR
• Degiro (I only used this one)

But

• Trading 212 because you can create a pie of 50 stocks like an ETF but charged at 33%

 

[goldensleather]

@bbonilla2 DEGIRO guarantees up to €20k of stocks, IBKR is up to €500k (also Lloyds bank insurance covers up to $30m).

IBKR is cheaper than DEGIRO when investments are more than 2k.

Other DEGIRO is cheaper. Also DEGIRO has a list of commission free ETFs.

I would start with DEGIRO and when you hit 20k transfer the stocks to IBKR and continue buying via DEGIRO.

T212 doesn’t allow moving stocks between brokers so I would avoid them for that reason.

ETF vs UKIT​

Personally I think ETFs are the superior product, easier to understand and less human intervention like with UK ITs (gearing, picking stocks etc).

I would still choose an ETF even with deemed disposal, the high exit tax, no offsetting losses, and no tax free exemption.

But I totally understand people who want to avoid these cons with ETFs and choose UK ITs or the likes of Berk B.

other​

I think Xetra usually has the lowest fees, also the volume matters, and the spread (diff between ask and bid price).

Justetf.com is great for comparing ETFs, go for a low TER and a fund that isn’t too small (>100m is usually pretty solid and shouldn’t be at risk of closing (forcing you to pay tax on gains).

I would pick accumulating rather than distributing to allow the fund to grow faster.

Also consider not just s&p500, world, all world, and world msi covers a lot more markets. The s&p500 has done amazing the last few decades but there is no guarantee that will continue.

to euro hedge or not to euro hedge?​

You can purchase an ETF with euro hedging, this ensures that the dollar / euro exchange rate will not have an effect, some investors like this as they don’t want to be exposed to currency risk, however the costs of the hedging over time generally reduces the performance of the portfolio enough that the exchange rate cost would be better than the hedging.

Angelo Colombo​

He has great EU focused ETF videos.
He avoids euro hedged funds.

https://p2pinvesting.eu/interactive...9094e733ba865e4a41bd46515ba15d8a#comment-1164

Maloney Financial​

He is also and he focuses on Ireland.
He prefers euro hedged funds.

Comparison of s&p500 ETFs:

He has more videos on ETFs if you search.

 

[gardenlady]

@bbonilla2 I don't agree with your cons list for JAM.

FX risk is a red herring if JAM is being compared to a S&P500 ETF. Both hold assets in USD (regardless of their trading currency), so the currency risk is the same. If you buy a bar of gold from me in euros or pounds, your exposure is to the price of gold, not euros or pounds.

LSE fees are high relative to other exchanges, but for holdings of any significance your fund fees will be much larger than LSE trading charges.

For me, the cons to JAM are:
* High management fees
* Active management risk
* Discounts to NAV
* Dividends paid out which I have to pay tax on
* Lower diversification
And probably some others that I'm not thinking of now

If you choose to buy the ETF then the exchange doesn't particularly matter.

Choose whichever broker you like yourself. Take into account fees as well as the user interface. It's not that going to make that much of a difference really. DG will likely end up the better option for ETFs (and IMO has a better UX), but IB can end up cheaper for ITs when you take into account exchange rates.

 

[bbonilla2]

@gardenlady That makes sense, I didnt quite get the currency risk as I thought exactly what you said but read it on another thread here.

I was under the impression though that with JAM Dividends was just reinvested, didnt realise they paid out.

 

[gardenlady]

@bbonilla2

I was under the impression though that with JAM Dividends was just reinvested, didnt realise they paid out.

Yup, check out the Google Finance link in your OP. Dividend yield is currently 0.88%. Not huge but not nothing, especially if you're a higher rate taxpayer and want to leave this compound for decades.