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Degiro, better to buy on Euronext or Nasdaq? Currency have any impact?

  • 07-08-2016 3:48pm
    #1
    ApeXaviour
    Registered Users, Registered Users 2 Posts: 5,523 ✭✭✭


    Hi,
    Am fairly new to this but putting some effort in.

    I'd like to invest in shares in a dual-listed company (ASML, which on NASDAQ and Euronext AMS). I've set up a DEGIRO account the fees are " 0.50 + USD 0.004 per share" for US exchanges and " 4.00 + 0.04%" for a dutch exchange.

    So questions:
    - So the fees for NASDAQ are actually cheaper right?
    - Is there a currency exchange fee with degiro? (can't find anything about it online)
    - Otherwise a share is a share right? It doesn't really matter which currency I buy it in if it's dual-listed right?


    Declan


Comments

  • #2
    Francie Barrett
    Registered Users, Registered Users 2 Posts: 16,931 ✭✭✭✭Francie Barrett


    It is slightly cheaper to buy on the NASDAQ, but I would be inclined to buy on the Amsterdam exchange anyway.

    1. Buying the NASDAQ listing exposes you to currency risk.
    2. FX charges from buying and then selling your Dollars.
    3. You may be required to fill out a W8-BEN for a US listed share.
    4. The dividend gets paid out as US dollar too, that will require an FX transfer.

    Don't know what Deigro charge for FX transfers, but other brokers usually charge 1-2% a pop.


  • #3
    Cathbadhian
    Registered Users, Registered Users 2 Posts: 21 ✭Cathbadhian


    Degiro FX fee is 0.10% using AutoFX. You can do it manually, but the fee is then €10 + 0.04%. Probably not worth the bother on modest amounts. AutoFX means any sales/dividends will be converted into Euro automatically also.

    Ordinarily, I would advise taking the option denominated in Euros. It eliminates your currency risk (the risk of gain erosion should the Euro appreciate against the Dollar over the years - i.e. your USD shares would convert into fewer Euros). Simple is usually better.

    If you go with the US exchange, Degiro will offer a prefilled W8-BEN online form. Takes a whole minute to review and submit. Reduces the US dividend tax from 30% to 15%. Note: You're still on the hook for Irish tax either way on divs (even if you reinvest them), but can claim the US withholding tax paid as a credit.


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