The exclusive meeting with journalists took place on Monday (29) at the Avenue headquarters, with Bruno Maximino, in charge of equity income, and Alexandre Artmann, COO and Director of Operations, in attendance.
Artmann and Cristiano Castro, BlackRock’s Head of Business Development, provided further information about UCITS ETFs, also referred to as Irish ETFs, which are predominantly examined in Ireland.
UCITS, or Undertakings for Collective Investment in Transferable Securities, is a regulatory system in the European Union that enables non-US residents to invest in ETFs in a compliant manner.
UCITS tax benefits
UCITS offer lower tax burdens compared to American ETFs, as highlighted by Avenue with the example of the Estate Tax.
American ETFs have an Estate Tax for assets inherited in the US, while UCITS ETFs are not subject to this tax, ensuring beneficiaries receive the full amount.
At the event, another tax that is implemented is the withholding tax, which is set at 30% for dividends from American ETFs. However, the percentage is much lower for Irish ETFs.
Long-term increase in profits
UCITS are distinguished from American ETFs by their minimal administrative and tax fees. Avenue’s analysis demonstrated that UCITS have the potential to yield profits that are up to 8 times greater than those of American ETFs, primarily because of variations in tax expenses and management fees.
UCITS offer an “interest damage” feature that enables investment growth over time. Dividends are automatically reinvested in the assets, boosting long-term returns for investors.
Impact of UCITS is the influence of UCITS.
Avenue has shared data about the number of customers who have signed up for this new investment option. Within a month, the platform has attracted 8,000 customers to its UCITS portfolio. Through collaboration with BlackRock, Avenue provides access to a range of 80 UCITS, covering various market sectors for diversification.
Irish ETFs on Avenue are currently traded in whole volumes and only in USD, which may be a concern for those looking to diversify across different currencies.
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