1x ETPs: NIO Now ISA Eligible

📊 Investing
21

1to1 is just the strategy, it’s price is 1to1 tied to NIO Adr performance since it buys and holds NIO shares. How many ETF shares represents how many ADRs is a different question but you are not getting 1 NIO share for 4$ :slight_smile:

The short answer is Yes, this is a wrapper so people can hold it inside their ISA. You have no good reason to buy this, if you are able to buy NIO shares instead.

Having said that, if you are a UK tax resident and eligible for an ISA, I highly recommend using one instead of any other account type. You get a limited amount of ISA allowance every year and it is gone next year regardless of you using it or not.

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22

Hey @protocol77 - thanks for reaching out.

By buying the ETP you don’t own the actual shares, but you do get the same exposure you would with the normal stock/ADR (the performance is tracked 1:1).

There are multiple benefits for this, depending on the broker used. T212 is ahead of the curve and offers fractional trading, but many other brokers still do not - meaning investors have to buy entire shares for exposure to popular stocks. That’s why we have priced these at around $5 - making it easier make custom portfolio with certain preferences like ‘equal weights’ since you can buy as much $ amount as you want,

For investors on T212, the most appealing benefits might be:

  1. Being able to hold these in an ISA, whereas NIO/Baidu/JD.com/Sea and other ADRs cannot be bought in the ISA wrapper
  2. Buying in their preferred currency (GBP, EUR, USD) rather than just USD
  3. Getting pre-market access to US stocks (trading before US markets open) since these trade on London Stock Exchange during EU hours.

Don’t hesitate to reach out if anything is unclear! :slight_smile:

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23

How about out of hours movement, is the included as well, or a better question, what is the expected tracking error over time?

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Hey @Dougal1984 - sorry for the late reply!

Yep, out of hours is included as well. The NAVs of these ‘Stock Trackers’ are based on the close price of the stock/ADR trading in the US; the tracking error is close to ~0 bps per day (expected to be somewhat close to the annual TER of 0.15%).

The amount is not expected to be high since there’s only a single underlying stock/ADR which generally has ample liquidity. Plus, there’s no other complex undertakings on the fund level, like securities lending, etc.

We keep it simple - just buy / sell the underlying(s) based on subscriptions and redemptions of the ETPs. :slight_smile:

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For anyone interested, here’s an article in FT about these 1x ETPs :point_down:

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