ETFs Irlandeses: o que são, como funcionam (e pra quem vale a pena)

What Are Irish ETFs and Are They Worth Investing In?

Introduction to Irish ETFs

• The speaker introduces the topic of Irish ETFs, expressing their intent to discuss whether investing in them is worthwhile, what they are, their advantages and disadvantages, and practical purchasing methods.

Understanding Irish ETFs

• Clarification that "Irish ETFs" does not imply investment solely in Irish companies; for example, an Irish ETF can invest in major U.S. companies like Apple or Microsoft.

• The IVV ETF is highlighted as a well-known option among Brazilian investors, which invests in the 500 largest American companies.

Comparison with Other ETFs

• The CSPX is introduced as an Irish ETF that similarly invests in the same large American companies as IVV but is custodied in Ireland.

• A comparison is made between the pricing of products (like iPhones) across different countries due to varying taxes and fees, paralleling this with how ETFs operate under different jurisdictions.

Tax Implications of U.S. vs. Irish ETFs

• Discussion on dividend taxation: U.S. ETFs typically have a 30% tax withheld at source on dividends, while inheritance tax applies if assets exceed $60k.

• In contrast, Irish ETFs offer a more favorable tax structure: only 15% tax on distributed dividends or zero tax for accumulation funds that reinvest dividends.

Types of Accumulation vs. Distribution Funds

• Explanation of two types of funds: distribution (which pays out dividends subject to taxes) and accumulation (which reinvest dividends without immediate taxation).

Investment Strategies: Understanding ETFs and Tax Implications

ETF Distribution vs. Accumulation

• In the case of distribution ETFs, a 15% tax is applied directly at the source. This impacts long-term performance due to broken compound interest.

• The efficiency of long-term investments in the U.S. is lower compared to Ireland, where accumulation ETFs perform better than distribution ones.

• The difference in taxation arises from each country's regulations and a treaty between the U.S. and Ireland that reduces withholding tax on American companies paying Irish funds from 30% to 15%.

Investing in Irish ETFs

• Currently, only Evinio brokerage offers access to Irish ETFs for Brazilian investors, with other options like Banco Inter and Nômade not providing this service yet.

• A brokerage fee of 0.5% applies when investing in Irish ETFs, with a minimum charge of $2.50 (approximately R$14), making it viable only for investments over R$500.

Practical Steps for Investment

• Investors should consider sending at least R$500 to Evinio for effective investment; smaller amounts may not justify the transaction fees.

• The European stock market operates from 5 AM to 1:30 PM Brasília time, which is crucial for trading Irish ETFs.

Selecting and Purchasing ETFs

• When searching for specific ETFs like XCS-PX (accumulation), it's noted that some distribution ETFs are unavailable through Evinio.

• For purchasing eligible government bond ETFs priced under available funds (e.g., $58), users can easily execute orders after reviewing costs.

Long-Term Investment Considerations

• Investing in Irish accumulation ETFs is beneficial for those looking to reinvest dividends automatically while minimizing tax headaches related to income declaration.

• Ideal candidates include those who invest at least R$500 monthly abroad or have significant foreign assets ($60k+), focusing on long-term growth and tax efficiency.

Personal Experience with Investments

• The speaker shares their experience of previously investing without utilizing Irish ETFs but plans to incorporate them into future investments due to their advantages.

• Despite having accumulated substantial funds in U.S. markets, they recognize the potential benefits of transitioning some investments into more efficient vehicles like Irish accumulation ETFs moving forward.