Amundi ETFs? (The risk of an ETF liquidating/merging)
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Amundi ETFs? (The risk of an ETF liquidating/merging)
I found this ETF
https://www.justetf.com/en/etf-profile. ... 0003XJA0J9
Amundi Prime All Country World UCITS ETF
The Amundi Prime All Country World UCITS ETF UCITS ETF Acc seeks to track the Solactive GBS Global Markets Large & Mid Cap index. The Solactive GBS Global Markets Large & Mid Cap index tracks large- and mid-cap stocks from developed and emerging markets worldwide.
It has an expense ratio of 0.07%.
The comparable fund from Vanguard appears to be this one, which has an expense ratio of 0.22%.
https://www.justetf.com/en/etf-profile. ... 0#overview
Vanguard FTSE All-World UCITS ETF (USD) Accumulating (large/mid caps in developed + emerging markets)
Is there a catch? Or is this 15 basis points of savings off a Vanguard fund?
https://www.justetf.com/en/etf-profile. ... 0003XJA0J9
Amundi Prime All Country World UCITS ETF
The Amundi Prime All Country World UCITS ETF UCITS ETF Acc seeks to track the Solactive GBS Global Markets Large & Mid Cap index. The Solactive GBS Global Markets Large & Mid Cap index tracks large- and mid-cap stocks from developed and emerging markets worldwide.
It has an expense ratio of 0.07%.
The comparable fund from Vanguard appears to be this one, which has an expense ratio of 0.22%.
https://www.justetf.com/en/etf-profile. ... 0#overview
Vanguard FTSE All-World UCITS ETF (USD) Accumulating (large/mid caps in developed + emerging markets)
Is there a catch? Or is this 15 basis points of savings off a Vanguard fund?
Last edited by UnstableFrog on Mon Feb 03, 2025 10:26 am, edited 1 time in total.
- asset_chaos
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Re: Amundi ETFs?
As the justetf page says the Amundi fund was launched in June 2024, you may want to check the prosectus to see if the low cost is a temporary teaser rate and if Amundi has the right after some date to raise the cost.
For US funds there is a statutory prospectus and a statement of additional information, which is a longer, more detailed version of the prospectus. I suggest checking the most detailed and complete version of the prospectus, but I don't know the correct terminology for a European fund.
For US funds there is a statutory prospectus and a statement of additional information, which is a longer, more detailed version of the prospectus. I suggest checking the most detailed and complete version of the prospectus, but I don't know the correct terminology for a European fund.
Regards, |
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Guy
Re: Amundi ETFs?
I think the 0.07% expense ratio on the Amundi ETF is definitely an appealing factor when comparing it to Vanguard's 0.22%. It's a nice saving of 15 basis points. That said, you may want to check things like liquidity, tracking error, and other factors before making a decision, as these could impact the overall performance.
Re: Amundi ETFs?
…. and the size of the fund, at least for a while, makes it risky.
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Re: Amundi ETFs?
Amundi/Lyxor funds are a disaster, do some so googling about how they close, relist and a merge their funds, leaving investors with large tax bills.
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Re: Amundi ETFs?
From what I can see, this is not just a promotional rate. As for example it is for this ETF, which currently has a 0.00% TER but next year will go up to 0.17%:asset_chaos wrote: Wed Jan 29, 2025 1:07 am As the justetf page says the Amundi fund was launched in June 2024, you may want to check the prosectus to see if the low cost is a temporary teaser rate and if Amundi has the right after some date to raise the cost.
https://www.justetf.com/en/etf-profile. ... 2903252349 (Scalable MSCI AC World Xtrackers UCITS ETF 1C)
Is it generally considered risky to buy into new funds?
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Re: Amundi ETFs?
The accumulating version already has €100m, while the distributing version has €2b. What's considered a good fund size?Siaigi wrote: Wed Jan 29, 2025 2:20 am …. and the size of the fund, at least for a while, makes it risky.
- asset_chaos
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Re: Amundi ETFs?
Not per se. The risk is that funds that don't gather enough assets are likleier to be closed as uneconomic to the fund sponsor, and new funds start with low assets and always have the risk that they never gather enough interest/money. At EUR100 million in assets and a 0.07% expense ratio, the fund in question earns EUR70,000 a year for the fund company. I don't know enough about Amumdi's cost of doing business to know if that's enough to earn back even the cost of running the fund; I doubt it. But of course, next year the fund could have a billion in assets; you just don't know, and that uncertainty is an extra source of risk.UnstableFrog wrote: Fri Jan 31, 2025 7:02 pmFrom what I can see, this is not just a promotional rate. As for example it is for this ETF, which currently has a 0.00% TER but next year will go up to 0.17%:asset_chaos wrote: Wed Jan 29, 2025 1:07 am As the justetf page says the Amundi fund was launched in June 2024, you may want to check the prosectus to see if the low cost is a temporary teaser rate and if Amundi has the right after some date to raise the cost.
https://www.justetf.com/en/etf-profile. ... 2903252349 (Scalable MSCI AC World Xtrackers UCITS ETF 1C)
Is it generally considered risky to buy into new funds?
Regards, |
|
Guy
Re: Amundi ETFs?
the distributing version has 2bn thoughasset_chaos wrote: Fri Jan 31, 2025 7:28 pmNot per se. The risk is that funds that don't gather enough assets are likleier to be closed as uneconomic to the fund sponsor, and new funds start with low assets and always have the risk that they never gather enough interest/money. At EUR100 million in assets and a 0.07% expense ratio, the fund in question earns EUR70,000 a year for the fund company. I don't know enough about Amumdi's cost of doing business to know if that's enough to earn back even the cost of running the fund; I doubt it. But of course, next year the fund could have a billion in assets; you just don't know, and that uncertainty is an extra source of risk.UnstableFrog wrote: Fri Jan 31, 2025 7:02 pm
From what I can see, this is not just a promotional rate. As for example it is for this ETF, which currently has a 0.00% TER but next year will go up to 0.17%:
https://www.justetf.com/en/etf-profile. ... 2903252349 (Scalable MSCI AC World Xtrackers UCITS ETF 1C)
Is it generally considered risky to buy into new funds?
I do not know whether that changes things, but yes arguably they could close the acc version and keep the dist version
2bn seems to me very safe, if one is ok with Dist
it's true Amundi closed or merged many ETFs (I googled as someone suggested, found at least 7 in a quick search, there may be more), partly due to the merger/acquisition with lyxor in 2022, but none of them was above 50m in assets
https://www.etfstream.com/articles/amun ... le-closure
https://www.etfstream.com/articles/amun ... low-demand
Trying to stay the course
Re: Amundi ETFs?
I believe accumulating and distributing shouldn't make a difference because they're different share classes of the same fund. But for comparison, VWRA is over $30bn assets under management. So even with $2bn, I'd be a little worried.
If the only risk is that the fund closes (and not tracking error), it may still be worth holding them in a tax advantaged account where no capital gains taxes would be due. At the same time, 0.15% in management fees isn't really a big deal. On a $500k portfolio, you're looking at $750/year in savings... but daily swings on the order of +/- $5k. It would be nice if this put some pressure on Vanguard to lower their fees...
If the only risk is that the fund closes (and not tracking error), it may still be worth holding them in a tax advantaged account where no capital gains taxes would be due. At the same time, 0.15% in management fees isn't really a big deal. On a $500k portfolio, you're looking at $750/year in savings... but daily swings on the order of +/- $5k. It would be nice if this put some pressure on Vanguard to lower their fees...
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Re: Amundi ETFs?
Having done some more research and thinking, I do think an ETF closing / liquidating is a serious risk in a taxable account, since you'll have to prematurely pay capital gains tax and won't get compounding on the lost CGT.
However, Amundi is not the only provider that does this, for example BlackRock / iShares did this semi-recently:
https://www.investmentnews.com/esg/blac ... etf/254316
It can be just as bad is if the ETF merges into another one, or changes its index, so that it's no longer serving your investment purposes and you're forced to sell anyway. I think even Vanguard has done this a few times.
I'm surprised I haven't really seen any discussion of this on the wiki or forums before. The advice for picking ETFs is usually just "pick the one with the lowest TER". Maybe this is not such a concern for the major ETFs that people buy in the US (VOO, VT, VTI, etc), but obviously the market overseas is not as mature.
However, Amundi is not the only provider that does this, for example BlackRock / iShares did this semi-recently:
https://www.investmentnews.com/esg/blac ... etf/254316
It can be just as bad is if the ETF merges into another one, or changes its index, so that it's no longer serving your investment purposes and you're forced to sell anyway. I think even Vanguard has done this a few times.
I'm surprised I haven't really seen any discussion of this on the wiki or forums before. The advice for picking ETFs is usually just "pick the one with the lowest TER". Maybe this is not such a concern for the major ETFs that people buy in the US (VOO, VT, VTI, etc), but obviously the market overseas is not as mature.
Re: Amundi ETFs?
There is no discussion becauseUnstableFrog wrote: Sun Feb 02, 2025 5:20 pm Having done some more research and thinking, I do think an ETF closing / liquidating is a serious risk in a taxable account, since you'll have to prematurely pay capital gains tax and won't get compounding on the lost CGT.
However, Amundi is not the only provider that does this, for example BlackRock / iShares did this semi-recently:
https://www.investmentnews.com/esg/blac ... etf/254316
It can be just as bad is if the ETF merges into another one, or changes its index, so that it's no longer serving your investment purposes and you're forced to sell anyway. I think even Vanguard has done this a few times.
I'm surprised I haven't really seen any discussion of this on the wiki or forums before. The advice for picking ETFs is usually just "pick the one with the lowest TER". Maybe this is not such a concern for the major ETFs that people buy in the US (VOO, VT, VTI, etc), but obviously the market overseas is not as mature.
- out of all the ETFs closed that we have linked and found, only 1 of them had a 1bn AUM. It was closed by blackrock which had another almost identically named ETF - possibly, an unusual circumstance. All other ETFs closed had <100m AUM
- it is very rare that ETFs with <100m are suggested on this forum. if they are discussed - usually proposed by a poster - there is a discussion about it
FYI: on the last trading day (ie Friday 31 Jan 2025) , the volume traded of the Amundi ETF (dist) is approximately 2x the volume traded of Vanguard FTSE all world (checked now, both on XETRA). I know volume is not liquidity, but at least using it a rough / imperfect idea, it looks quite fine.
I genuinely think this Amundi ETF is ok and has a good TER, and will buy it in my taxable if I need to.
Trying to stay the course
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Re: Amundi ETFs?
Yes they all had low assets at the time they were closed, but for example here is Amundi closing an ETF with $42m in assets, although at its peak it had over $700m.jg12345 wrote: Sun Feb 02, 2025 5:44 pm out of all the ETFs closed that we have linked and found, only 1 of them had a 1bn AUM. It was closed by blackrock which had another almost identically named ETF - possibly, an unusual circumstance. All other ETFs closed had <100m AUM
So although a fund is big now, it's possible that later on, investors decide to abandon it and then they would close it for being too small / unprofitable.
I'm not saying that's going to be the case for the Amundi Prime World ETF I linked earlier, but it's certainly a possibility.
Re: Amundi ETFs?
true, but then this is possible for literally any ETF with a ballpark 1bn AUM, and there are plenty that we regularly recommend here and might be in that ballpark. and to be precise, that fund was a bit niche (some multifactor whatever), not an established ACWI ETF.UnstableFrog wrote: Mon Feb 03, 2025 10:34 amYes they all had low assets at the time they were closed, but for example here is Amundi closing an ETF with $42m in assets, although at its peak it had over $700m.jg12345 wrote: Sun Feb 02, 2025 5:44 pm out of all the ETFs closed that we have linked and found, only 1 of them had a 1bn AUM. It was closed by blackrock which had another almost identically named ETF - possibly, an unusual circumstance. All other ETFs closed had <100m AUM
So although a fund is big now, it's possible that later on, investors decide to abandon it and then they would close it for being too small / unprofitable.
I'm not saying that's going to be the case for the Amundi Prime World ETF I linked earlier, but it's certainly a possibility.
One point: this was useful because now that I checked, I think all Vanguard Lifestrategy (a classic 1 ETF option we suggest here, and it's on the list of non-us ETF) are even below <100m (source: justetf.com, checked today). <100m in fact seem a bit risky to me, a lot more than 2bn+, and I will make sure to note that whenever I see those ETFs mentioned here.
Trying to stay the course
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Re: Amundi ETFs?
I would like to add, the issue is not just closing, it is also de-listing on one exchange to re-list on another, or moving domicile, from Luxembourg to Ireland. These actions can also lead to triggering capital gains.UnstableFrog wrote: Sun Feb 02, 2025 5:20 pm I do think an ETF closing / liquidating is a serious risk in a taxable account, since you'll have to prematurely pay capital gains tax and won't get compounding on the lost CGT.
For example, a fund with £450m AUM;
https://monevator.com/etf-delisting/