Following up on this, according to justetf.com (source below) thanks to european law, all synthetic UCITS ETFs have to have at least 90% of their NAV (Net Asset Value) collaterised (backed by collateral assets) and some actually have more than 100% collaterised.
I then had a quick look at the Factsheet and KIID of two synthetic ETF I fouNd on justetf.com listed in either London or Frankfurt, both have “unfunded swaps”:
Lyxor MSCI All Country World UCITS ETF - Acc - The only references I found were these:
Xtrackers S&P 500 Swap UCITS ETF 1C -
What are your thoughts?
Hi @Richard, out of curiosity, in the end, did you consider changing to a synthetic alternative ETF with lower fees?
I did consider it, but decided the loss due to spreads when switching would be more than the likely gain. I will still make such an investment when I next buy a S&P 500 tracker.
In fact, my most recent new purchase of a US market tracker has been the ESG fund SUAS iShares MSCI USA SRI ETF. That has been doing well compared to VUSA / IUSA and the absence of oil and tobacco stocks helps to avoid increasing my exposure to those sectors. I also invest in SUWS for the same reason compared to SWDA / VWRL.
6% of SUAS is TSLA, which dips my toe in that lake.
I like to have a bit of these trackers as a hedge for my direct share investments and remind me what return I could get in a simple way.
I put these in my ISA where the hassle of figuring tax on accumulating ETFs is avoided.