Finding ETFs on IB Interactive brokers

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Finding ETFs on IB Interactive brokers

Post by international001 » Mon Sep 10, 2018 8:24 am

I'm trying to see if they have 2 vanilla ETFs: SWDA, AGGH

I cannot find them?

https://www.interactivebrokers.co.uk/en ... 7&exch=lse

I understand you have to look at the right exchange. From the trial account I have, it seems they are both in LSEETF

longvista
Posts: 35
Joined: Fri Aug 10, 2018 12:18 pm

Re: Finding ETFs on IB Interactive brokers

Post by longvista » Mon Sep 10, 2018 8:35 am

SWDA and AGGH definitely exist in the TWS application offered by IB. In other words, they are tradeable through your IB account, it just seems like that list is out of date, like a lot of other information on IB's website. That's the downside of a low-cost broker - they cut corners with such things.

ICH
Posts: 42
Joined: Wed Jun 13, 2018 3:08 am

Re: Finding ETFs on IB Interactive brokers

Post by ICH » Mon Sep 10, 2018 9:19 am

international001 wrote:
Mon Sep 10, 2018 8:24 am
I'm trying to see if they have 2 vanilla ETFs: SWDA, AGGH

I cannot find them?

https://www.interactivebrokers.co.uk/en ... 7&exch=lse

I understand you have to look at the right exchange. From the trial account I have, it seems they are both in LSEETF
List is outdated, don't use it.

Just to make sure you don't do a mistake with the currencies, always look-up the ETF's website. You can see where it is listed and in which currency it is traded under the tab "Listing".
SWDA: https://www.ishares.com/uk/individual/e ... f-acc-fund
AGGH: https://www.ishares.com/uk/individual/e ... (acc)-fund

SWDA is traded in 3 different exchanges, in 3 different currencies. So when you buy it, make sure you choose the correct exchange/currency.

longvista
Posts: 35
Joined: Fri Aug 10, 2018 12:18 pm

Re: Finding ETFs on IB Interactive brokers

Post by longvista » Mon Sep 10, 2018 9:33 am

ICH wrote:
Mon Sep 10, 2018 9:19 am
Just to make sure you don't do a mistake with the currencies, always look-up the ETF's website. You can see where it is listed and in which currency it is traded under the tab "Listing".
SWDA: https://www.ishares.com/uk/individual/e ... f-acc-fund
AGGH: https://www.ishares.com/uk/individual/e ... (acc)-fund

SWDA is traded in 3 different exchanges, in 3 different currencies. So when you buy it, make sure you choose the correct exchange/currency.
Good point. Actually, do your due diligence with the ETF Issuer's information as well. For example, iShares' AGGG ETF claims to be listed on Xetra in USD, but if you look on Xetra, it's actually trading in EUR. Therefore, in this case, iShares' information is also out-of-date/incorrect.

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: Finding ETFs on IB Interactive brokers

Post by international001 » Wed Sep 12, 2018 6:44 am

Thanks.. so I guess I won't know till I buy it

I have EUR, which currency would you recommend to buy it in? My thought was that EUR or USD would not make a difference. Any other currency would increase the cost

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: Finding ETFs on IB Interactive brokers

Post by international001 » Wed Sep 12, 2018 6:46 am

Also, I talked to a IB brokerage representative. They looked less informed than in DeGiro. For instance, DeGiro knew about the new Spanish law allowing tax-free transfers between ETFs (they are looking whether they'll implement it); IB had no idea.

Any consensus about which one is better?

ICH
Posts: 42
Joined: Wed Jun 13, 2018 3:08 am

Re: Finding ETFs on IB Interactive brokers

Post by ICH » Wed Sep 12, 2018 7:34 am

international001 wrote:
Wed Sep 12, 2018 6:44 am
I have EUR, which currency would you recommend to buy it in? My thought was that EUR or USD would not make a difference. Any other currency would increase the cost
Buy it in the currency you have, i.e. EUR. Exchanging your euros to USD, GBP or whatever before you buy the ETF carries similar currency exchange costs and makes no sense.
international001 wrote:
Wed Sep 12, 2018 6:46 am
Also, I talked to a IB brokerage representative. They looked less informed than in DeGiro. For instance, DeGiro knew about the new Spanish law allowing tax-free transfers between ETFs (they are looking whether they'll implement it); IB had no idea.

Any consensus about which one is better?
I am not aware about tax laws in Spain. I assume that if a law is passed, all brokers would have to implement it, if it was relevant to them.

I have both DeGiro (custody account) & IB (US based account). From the two, I like IB better but truth is DeGiro is cheaper.

longvista
Posts: 35
Joined: Fri Aug 10, 2018 12:18 pm

Re: Finding ETFs on IB Interactive brokers

Post by longvista » Wed Sep 12, 2018 8:13 am

ICH wrote:
Wed Sep 12, 2018 7:34 am
international001 wrote:
Wed Sep 12, 2018 6:44 am
I have EUR, which currency would you recommend to buy it in? My thought was that EUR or USD would not make a difference. Any other currency would increase the cost
Buy it in the currency you have, i.e. EUR. Exchanging your euros to USD, GBP or whatever before you buy the ETF carries similar currency exchange costs and makes no sense.
Another thing to consider here is that if the fund's base currency is USD, then dividends/interests will also be paid to you in USD. If you buy an ETF listed in EUR, you will have to convert all future USD distributions into EUR to buy more shares of the same ticker. It's not a problem to buy the same ETF in different currencies, but then you'll have 2 tickers for the same ETF. I prefer to keep it simple and only buy an ETF in the currency of it's base currency. So if the ETF's base currency is USD, I convert my EUR into USD before buying the ETF. The fees (spread and IB commission) associated with the conversion are ridiculously small. It's a small fee to pay for simplicity.

ICH
Posts: 42
Joined: Wed Jun 13, 2018 3:08 am

Re: Finding ETFs on IB Interactive brokers

Post by ICH » Wed Sep 12, 2018 9:35 am

longvista wrote:
Wed Sep 12, 2018 8:13 am

Another thing to consider here is that if the fund's base currency is USD, then dividends/interests will also be paid to you in USD. If you buy an ETF listed in EUR, you will have to convert all future USD distributions into EUR to buy more shares of the same ticker. It's not a problem to buy the same ETF in different currencies, but then you'll have 2 tickers for the same ETF. I prefer to keep it simple and only buy an ETF in the currency of it's base currency. So if the ETF's base currency is USD, I convert my EUR into USD before buying the ETF. The fees (spread and IB commission) associated with the conversion are ridiculously small. It's a small fee to pay for simplicity.
longvista,
I am not certain if this is the case with all ETFs, but I know this is happening with VWRL. There are 2 options if I have EUR and my future spending will be in EUR:

Option 1: I buy it in EUR on Amsterdam, Paris or XETRA. Every quarter it will give me dividends in USD, so I exchange that to EUR and buy more shares during the accumulation stage. Some time in the future, during the distribution phase, I will be selling my shares, getting EUR and spending it. Overall I have paid currency exchange costs only once and that is on the dividends only.

Option 2: Every time I put money in the account, I exchange my EUR to USD and buy it in USD on the LSE. I am getting the dividends in USD, so no issue to buy more shares. Some time in the future, during the distribution phase, I will be selling my shares, getting USD, exchanging it to EUR and spending it. Overall I have paid currency exchange costs:
a. Before buying: for all the money I put in, and
b. After selling: for all the money I take out (which includes the dividends of option 1 above)

I believe option 1 is better.

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: Finding ETFs on IB Interactive brokers

Post by international001 » Wed Sep 12, 2018 11:56 am

longvista wrote:
Wed Sep 12, 2018 8:13 am


Another thing to consider here is that if the fund's base currency is USD, then dividends/interests will also be paid to you in USD. If you buy an ETF listed in EUR, you will have to convert all future USD distributions into EUR to buy more shares of the same ticker. It's not a problem to buy the same ETF in different currencies, but then you'll have 2 tickers for the same ETF. I prefer to keep it simple and only buy an ETF in the currency of it's base currency. So if the ETF's base currency is USD, I convert my EUR into USD before buying the ETF. The fees (spread and IB commission) associated with the conversion are ridiculously small. It's a small fee to pay for simplicity.
I plan to use accumulation funds, so not a problem.

But why do you mean 2 tickers? You could convert the dividends into EUR and you end up with the same ticker

I guess the question is who does the exchange. Wether your broker (if ETF is sold in USD in the exchange) or the exchange itself (if the ETF is sold in EUR in the exchange). Would the spread be about the same?

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: Finding ETFs on IB Interactive brokers

Post by international001 » Wed Sep 12, 2018 11:59 am

ICH wrote:
Wed Sep 12, 2018 7:34 am


I am not aware about tax laws in Spain. I assume that if a law is passed, all brokers would have to implement it, if it was relevant to them.

I have both DeGiro (custody account) & IB (US based account). From the two, I like IB better but truth is DeGiro is cheaper.
I wished. But brokers still have to implement that possibility. I guess at the end they will do it, since it's a way of attracting customers
Why do you prefer IB? Which one do you think more likely to implement the law. I would think DeGiro is more oriented to European customers, so chances are they have more interest on implementing it.

longvista
Posts: 35
Joined: Fri Aug 10, 2018 12:18 pm

Re: Finding ETFs on IB Interactive brokers

Post by longvista » Thu Sep 13, 2018 10:34 am

ICH wrote:
Wed Sep 12, 2018 9:35 am
Option 1: I buy it in EUR on Amsterdam, Paris or XETRA. Every quarter it will give me dividends in USD, so I exchange that to EUR and buy more shares during the accumulation stage. Some time in the future, during the distribution phase, I will be selling my shares, getting EUR and spending it. Overall I have paid currency exchange costs only once and that is on the dividends only.

Option 2: Every time I put money in the account, I exchange my EUR to USD and buy it in USD on the LSE. I am getting the dividends in USD, so no issue to buy more shares. Some time in the future, during the distribution phase, I will be selling my shares, getting USD, exchanging it to EUR and spending it. Overall I have paid currency exchange costs:
a. Before buying: for all the money I put in, and
b. After selling: for all the money I take out (which includes the dividends of option 1 above)

I believe option 1 is better.
In the case that you know your future currency, then option 1 is better indeed. I was assuming that everyone is like me and they don't know their future currency.

longvista
Posts: 35
Joined: Fri Aug 10, 2018 12:18 pm

Re: Finding ETFs on IB Interactive brokers

Post by longvista » Thu Sep 13, 2018 10:40 am

international001 wrote:
Wed Sep 12, 2018 11:56 am
longvista wrote:
Wed Sep 12, 2018 8:13 am


Another thing to consider here is that if the fund's base currency is USD, then dividends/interests will also be paid to you in USD. If you buy an ETF listed in EUR, you will have to convert all future USD distributions into EUR to buy more shares of the same ticker. It's not a problem to buy the same ETF in different currencies, but then you'll have 2 tickers for the same ETF. I prefer to keep it simple and only buy an ETF in the currency of it's base currency. So if the ETF's base currency is USD, I convert my EUR into USD before buying the ETF. The fees (spread and IB commission) associated with the conversion are ridiculously small. It's a small fee to pay for simplicity.
I plan to use accumulation funds, so not a problem.

But why do you mean 2 tickers? You could convert the dividends into EUR and you end up with the same ticker

I guess the question is who does the exchange. Wether your broker (if ETF is sold in USD in the exchange) or the exchange itself (if the ETF is sold in EUR in the exchange). Would the spread be about the same?
I mean that if you simply follow the principle of "buy the ETF in the currency that you have", then at first you'll buy it in EUR, because you make your contributions in EUR, but if the fund distributes dividends in USD, then you will have USD. If you now buy the same ETF in USD, you will end up with 2 tickers. In my mind, this complication is better avoided and if you get USD distributions then yes, convert it to EUR and buy more of the ETF in EUR.

I am not sure what you mean by "who does the exchange". From what I understand, you submit your order via your broker who then executes the order on the exchange which lists the ETF you are interested in, in the currency that you submitted your order in. In other words, if you submit an order to buy shares of VWRL in EUR, then your broker will see which exchange listing VWRL in EUR (Amsterdam, Paris, Xetra, ...) has the best price. Same for selling. Please explain your question.

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: Finding ETFs on IB Interactive brokers

Post by international001 » Thu Sep 13, 2018 12:44 pm

Oh.. I was thinking in transforming the USD in EUR and buying the same ticker

My thought is .. let's assume the ETF is in USD. If you buy it in a USD exchange, you have to transform EUR in USD, paying a charge of + C %. Basically C is the spread of USD/EUR, assuming the broker doesn't charge you anything. Let's say in the USD exchange the ETF has a spread of X%

But if you buy the ETF in a EUR exchange, there is a spread of Y%

So my thought would be that Y = X +C. The EUR exchange is less efficient. Or am I getting it wrong?

longvista
Posts: 35
Joined: Fri Aug 10, 2018 12:18 pm

Re: Finding ETFs on IB Interactive brokers

Post by longvista » Sat Sep 15, 2018 2:21 am

international001 wrote:
Thu Sep 13, 2018 12:44 pm
Oh.. I was thinking in transforming the USD in EUR and buying the same ticker

My thought is .. let's assume the ETF is in USD. If you buy it in a USD exchange, you have to transform EUR in USD, paying a charge of + C %. Basically C is the spread of USD/EUR, assuming the broker doesn't charge you anything. Let's say in the USD exchange the ETF has a spread of X%

But if you buy the ETF in a EUR exchange, there is a spread of Y%

So my thought would be that Y = X +C. The EUR exchange is less efficient. Or am I getting it wrong?
If I understand you correctly, then why would the EUR exchange be less efficient? If your contributions are in EUR, then buying the ETF in EUR would be to most efficient option. When buying in USD, you would first have to convert your EUR into USD. This incurs the cost of the spread of EUR/USD and broker commissions, making it less efficient to buy the ETF in USD.

If there was no spread and broker fees when converting from EUR to USD and everything else being equal, there wouldn't be a difference in which currency you buy the ETF in. In reality, exchanges have different fees for different currencies, so that also has a small impact.

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: Finding ETFs on IB Interactive brokers

Post by international001 » Thu Sep 20, 2018 2:37 am

I thought the spread would accumulate if you are trading the securities in a currency different than the currency of the security.
Otherwise you could trade very secure securities (short term government bonds, cash?), and arbitrage away the currency spread

But I don't have real data, so I may be absolutely wrong. IF somebody does, please share.

Post Reply