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Is eToro safe for long-term investing?

  • 29-11-2021 6:45pm
    Registered Users Posts: 1

    Hi all, I'm already maxing out my pension contributions so have been looking for a passive investment strategy (e.g. ETFs) for retirement without having to pay deemed disposal. So I came across eToro, which offers ETFs wrapped in a non-leveraged CFD for people with residency in the EU. CFDs currently fall within Revenue's CGT which is perfect for compounding growth. I believe Etoro wraps ETFs in CFDs because many of those ETFs don't conform with EU laws. I'm happy with eToro fees (lack of, except 0.5% currency conversion fee, but there are potential ways to avoid that cost). Having my investments denominated in USD is not a problem for me either.

    What I'm wondering now is how safe would it be to hold potentially hundreds of thousands in eToro CFD-wrapped ETFs throughout the years and decades ahead.

    Etoro says when you buy individual stocks or ETFs you're buying the underlying asset. But it's not clear to me whether the same applies in Europe due to the CFD complexity.

    Does anybody know what kind of guarantees an investor has in regards to non leveraged ETF CFDs in case eToro goes bust?