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Etoro and US ETFs

  • 06-02-2021 1:39am
    #1
    lausp
    Registered Users, Registered Users 2 Posts: 113 ✭✭


    Anyone using Etoro to buy VOO and the likes?

    It seems they are offering them as CFDs which at 1x leverage behave the same as owning the share itself, including receiving the dividend.

    Any disadvantages to this or the Etoro platform in general?


Comments

  • #2
    daheff
    Registered Users, Registered Users 2 Posts: 5,898 ✭✭✭daheff


    Look at eToro behavior with some users over GME. They enforced sales on people.

    If they did it once they could do it again. Thread warily with eyes open.


  • #3
    richie123
    Registered Users Posts: 790 ✭✭✭richie123


    daheff wrote: »
    Look at eToro behavior with some users over GME. They enforced sales on people.

    If they did it once they could do it again. Thread warily with eyes open.

    Enforced sales ? What do you mean


  • #4
    lausp
    Registered Users, Registered Users 2 Posts: 113 ✭✭lausp


    daheff wrote: »
    Look at eToro behavior with some users over GME. They enforced sales on people.

    If they did it once they could do it again. Thread warily with eyes open.

    Didn't they do similar on revolut and degiro, restricting buys etc?

    Is Etoro generally safe for a long term strategy such as regular buy and hold of ETFs?


  • #5
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,413 Mod ✭✭✭✭Jim2007


    lausp wrote: »
    Any disadvantages to this or the Etoro platform in general?


    Apart from not owning the fund??? The risk profile is entirely different because it has no owner relationship to the underlying fund.


    Fund is not available in Europe because the fund refuses to provide sufficient information that we consider necessary for retail investors to be able to evaluate the fund's behavior. And now you want to by a CFD based on that....


  • #6
    lausp
    Registered Users, Registered Users 2 Posts: 113 ✭✭lausp


    Jim2007 wrote: »
    Apart from not owning the fund??? The risk profile is entirely different because it has no owner relationship to the underlying fund.


    Fund is not available in Europe because the fund refuses to provide sufficient information that we consider necessary for retail investors to be able to evaluate the fund's behavior. And now you want to by a CFD based on that....

    I want access to VOO because I want to buy roughly 1 unit of it a month over many years and not have to worry about deemed disposal.

    VOO is one of the largest ETFs in the US. It's hardly an unknown entity.

    My question is specifically around the strategy of buying into this via CFD on Etoro. Maybe it's an idiotic idea, but that's why I'm asking. I don't know.

    I used to buy VOO on degiro before it was blocked.


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  • #7
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,413 Mod ✭✭✭✭Jim2007


    lausp wrote: »
    I want access to VOO because I want to buy roughly 1 unit of it a month over many years and not have to worry about deemed disposal.


    But that is not what you are doing! You will never own a single share with your purchases. You are buying a different instrument with a different risk profile.


    lausp wrote: »
    I
    VOO is one of the largest ETFs in the US. It's hardly an unknown entity.



    It's not about size, it is about the fact that they have decided not to disclose information that we consider necessary for retail investors to be able to evaluate the product.



    CFDs are derivatives, they are complex products designed to make sure the seller almost always wins. And consequently we advise retail clients to avoid them or at least keep their holding a small holding in a portfolio - 5% - 7%, but you want to go all in.


    At the end of the day, if you want to ignore all the general warnings out there about using CFDs etc... it's up to you.


  • #8
    daheff
    Registered Users, Registered Users 2 Posts: 5,898 ✭✭✭daheff


    richie123 wrote: »
    Enforced sales ? What do you mean

    Some people held GME and eToro forced stop loss sales onto them.

    They subsequently refunded people their losses....but still. Not a broker I'd be comfortable working with in the future.


  • #9
    daheff
    Registered Users, Registered Users 2 Posts: 5,898 ✭✭✭daheff


    lausp wrote: »
    Didn't they do similar on revolut and degiro, restricting buys etc?

    Is Etoro generally safe for a long term strategy such as regular buy and hold of ETFs?

    Revolut stopped people being able to buy some stocks....but not forced sales.

    Didn't hear anything on degiro restrictions.


  • #10
    Timmaay
    Registered Users, Registered Users 2 Posts: 11,394 ✭✭✭✭Timmaay


    Jim2007 wrote: »
    CFDs are derivatives, they are complex products designed to make sure the seller almost always wins. And consequently we advise retail clients to avoid them or at least keep their holding a small holding in a portfolio - 5% - 7%, but you want to go all in.

    In terms of designed to make sure the seller always wins, is this purely down to the leaveraged nature of CFDs, so beginners in particular will take out positions too large and inevitably result in getting wiped out, or is it the spreads and overnight fees? Or something else that I'm totally missing ha?


  • #11
    richie123
    Registered Users Posts: 790 ✭✭✭richie123


    daheff wrote: »
    Some people held GME and eToro forced stop loss sales onto them.

    They subsequently refunded people their losses....but still. Not a broker I'd be comfortable working with in the future.

    Just to be clear they forced gme shareholders to sell without their knowledge ??


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  • #12
    daheff
    Registered Users, Registered Users 2 Posts: 5,898 ✭✭✭daheff


    richie123 wrote: »
    Just to be clear they forced gme shareholders to sell without their knowledge ??

    A number of reports of this on the internet...and from a couple of WhatsApp.

    So no definite proof, just anecdotal evidence...but seems very plausible.


  • #13
    richie123
    Registered Users Posts: 790 ✭✭✭richie123


    daheff wrote: »
    A number of reports of this on the internet...and from a couple of WhatsApp.

    So no definite proof, just anecdotal evidence...but seems very plausible.

    I setup and etoro account but I'd say I'll be using degiro more so from here on in


  • #14
    lausp
    Registered Users, Registered Users 2 Posts: 113 ✭✭lausp


    Are investment funds a better choice than trying to get around the ETF restrictions?

    E.g lse:bmpg?


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