For residents of certain countries, EU-domiciled ETFs turn into a complex and expensive tax nightmare.
Meanwhile thanks to PRIIPS, EU residents can no longer buy non-EU-domiciled ETFs since 2018 or so. US-domiciled ETFs for example were generally taxed like shares.
Has anyone had much success mostly-replicating a passive ETF with a widely diversified pies, while getting the tax treatment of regular shares?
Or do you find it too difficult to manage? Or are your returns much worse than the target ETF itself?
Iāve done this for active ETFs and ITs from Baillie Gifford and Ark Invest.
Itās a bit of a pain to manage at least initially, but I aim to move to updating the pies monthly soon, preferably quarterly or half-yearly in the long run. The aimās to make it as āset and forgetā as poss.
Itās not an exact science but performance more or less mirrors the ETFs. Many of the BG trusts include private companies though, so theyāre obviously precluded. Itāll be interesting to see how the pies do over three or five years.
I have 12 in total. Thereās a fair amount of overlap and Iām still trying to nail down the allocation, may just chuck Ā£50/m into each. The recipes are below for anyone interested:
iāve been playing around with some one them ont he practice account before i find the courage to make my own āreplica ETFā and then use something neutral like Tradingview.com to match performance. neutral = not having spreads built into prices for accuracy. so far my ARK pies track really well on average, even though all the stocks may not be available on the ISA or Invest platform. what you also must remember is that some of these ETFs have ADR holdings which you can very well replicate by buying the actual stock and that will impact the tracking of the performance too.
Hi topher, thank you for the links to the ETF-replicating pies! I wonder how many others are doing this, as needing to avoid ETFs is a bit of a niche situation to be in.
Looks like some effort to set up, and then if the ETF weightings change youād have to go in and type in the new weights.
Looks like thereās no public API really (Does Trading212 have an API?), let alone an API for setting the percentages in pies.
I think at a minimum Iād want to be able to upload a CSV with the desired tickers and percentages, may be even run a script to scrape my fav ETFs holdings and set the percentages.
And of course export the holdings for analysis in other tools.
i made different sector pies with the main holding of each spider sector ETF⦠itās a good strategy for rotating between sector easily moving money from one pie to another