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Individual Stock that tracks an ETF



  • Registered Users Posts: 6,797 ✭✭✭amacca

    You have have kind of answered your own question there is no such thing as an individual stock that behaves like an ETF as ETFs are a baskets/collections of stocks that usually aim to track a specific index (sometimes thousands of stocks) can buy and sell an ETF as a single entity and therefore avoid having to buy and sell each stock in an index in a particular percentage (perhaps based on market cap etc) and the costs associated with that many trades but avail of diversification and the idea that any one stock can go to zero but over the long term the market always rises ..…ETFs are passive and subject to deemed disposal an the higher CGT rate as you mentioned....which is a bit mental if you ask me as I think they are an ideal product for a novice investor and we shouldnt be discouraging citozens to ingest snd forcing those that will anyway into potentially riskier products is a bit loopy and out of whack with a lot of other jurisdictions etc

    Investment trusts like the one you mentioned are a basket of stocks that can be bought and sold like an individual stock...they are managed and not subject to deemed disposal and only attract 33%

    JAM is one, there are others, FCIT, Monks etc etc and theres something like Berkshire hathaway which is a number of businessess and stocks which can be bought and sold like an individual stock too...these are managed, not passive and generally have a lot less stocks/equities in them (from approx 400 in something FCIT to approc 40 in something like JAM afaik) so you coukd argue they are not as diversified as an ETF and theres a management risk...although some would point to JAM doing better thsn the SP500 over the past 10/15 yrs I think and others would say once you are over 100 stocks youve got most of the diversification benefit...assuming they stocks arent concentrated in one particular sector etc

    As things stand, capital gains are taxed at 33% on ITs but you should be aware that if there are any dividends those will be taxed and marginal rates so you might want to find out if any you are thinking of investing in pay a dividend if availing of the 33% is youre only concern

    So no there are no stocks that behave like an ETF (as an ETF is a collection of stocks) but there are collections of stocks that can be bought and sold like a single stock and could be said to behave somewhat like an ETF (although its not passive and could be argued to be less diversified etc)... and those are investment trusts

    If you cant access them on degiro you could try interactive brokers, trade republic, trading 212 or the more traditional brokers but dyor regarding guarantees, capital protection, regukation etc etc

    btw the 33% tax probably shouldnt be your only concern but thats up to you ....there is a school of thought that even with the deemend disposal and higher tax ETFs may not be a bad option in certain circumstances either

    Hope that helps

  • Registered Users Posts: 120 ✭✭Cookiepus

    Thank you very much Amacca.

    I think i will look into the other investment trusts you mentioned.


  • Registered Users Posts: 952 ✭✭✭Prezatch

    Berkshire Hathaway is an example, although it's not very diversified, but a strong performer year after year.