European Index Tracker recommendations?

[raybarrow]

Hi Folks,
First Question: Given the 'falls' following the American bank trouble, i thought it might be a good time to have a look at another tracker. Children, charities, ISAs, pensions - all that sort of stuff is in place. I have a HYP portfolio, a couple of funds, and a Global Tracker and a FTSE All Share Tracker. As a Global is at least half american anyway I was looking at Europe Ex-UK as another Index Tracker rather than anything that pays in Dollars,Yens etc but a simple GBP.

Second question: If you don't 'need' the income is there any advantage, tax or otherwise, in Income as oppossed to Accumulation investments. All I see is the choice of what to do with the income against the loss of power of compounding.

Any recommendations?
Ray.

[Tedx]

Vanguard VERX is as good as any.

https://www.hl.co.uk/shares/shares-sear ... rope-ex-uk

[JohnB]

Use ACC units if tax sheltered (ISA, SIPP). Use INC units if not, otherwise your capital gains calculations will be horrid.

I use Fidelity Europe tracker Acc FIAAGH and Fidelity Index Tracker Europe INC FIAAHM to diversify away from Vanguard

[EthicsGradient]

Or there's the HSBC European Index OEIC: https://www.fidelity.co.uk/factsheet-da ... statistics

With a (very slightly) smaller ongoing charge, and available as income or accumulation, and as a UK-based OEIC, no Excess Reportable Income to worry about reporting, unlike Ireland or Luxembourg-based ETFs.

[mc2fool]

Second question: If you don't 'need' the income is there any advantage, tax or otherwise, in Income as oppossed to Accumulation investments.

Outside of a tax shelter accumulation units require a bit more record keeping, 'cos the taxman treats the rolled up dividends exactly as if you'd received them in hand and reinvested them yourself.

So, you have to declare the rolled up dividends, just as if you'd actually received them, and they become subject to dividend income tax (if you're not within the allowance). That's not too much of a faff as they'll appear on the tax certificate you get from your broker annually, along with any other dividends you received.

But you also have to include them in your base cost for capital gains tax purposes, as it's just like you used them to buy more of the fund. So, the rolled up dividends will reduce your (potentially) taxable gain when you finally sell, but you have to keep track of them along the way.

[raybarrow]

Hi,

Outside of a tax shelter accumulation units require a bit more record keeping, 'cos the taxman treats the rolled up dividends exactly as if you'd received them in hand and reinvested them yourself.

So, you have to declare the rolled up dividends, just as if you'd actually received them, and they become subject to dividend income tax (if you're not within the allowance). That's not too much of a faff as they'll appear on the tax certificate you get from your broker annually, along with any other dividends you received.

But you also have to include them in your base cost for capital gains tax purposes, as it's just like you used them to buy more of the fund. So, the rolled up dividends will reduce your (potentially) taxable gain when you finally sell, but you have to keep track of them along the way.

That's a good point. CGT had never come into the equation before but with an inherited house sale going through (fingers crossed) possibly before the Tax Year End I need to keep an eye on that as I do have some outside the ISAs.

Cheers,
Ray

[AJC5001]

Vanguard VERX is as good as any.

https://www.hl.co.uk/shares/shares-sear ... rope-ex-uk

Or VERG if you want the Accumulation version.

https://www.hl.co.uk/shares/shares-search-results/v/vanguard-ftse-developed-europe-ex-uk-ucits

Adrian

[GeoffF100]

Vanguard Developed Europe ex UK:

https://www.vanguardinvestor.co.uk/inve ... c/overview

You can add some FTSE 100:

https://www.vanguardinvestor.co.uk/inve ... c/overview

[hokkaidobear]

Here is a good list:

Lyxor Core STOXX Europe 600 UCITS ETF
Vanguard FTSE Developed Europe UCITS ETF
iShares STOXX Europe 600 UCITS ETF
Xtrackers STOXX Europe 600 UCITS ETF

[GeoffF100]

Use ACC units if tax sheltered (ISA, SIPP). Use INC units if not, otherwise your capital gains calculations will be horrid.

It is simpler to use income units for a UK domiciled OEIC that is outside a tax shelter. I usually use income units within a tax shelter too. (I like to decide where to reinvest my dividends.)

With ETFs you have the complexity of Excess Reportable Income regardless of whether you have the income or distributing version. Accumulating ETFs are marginally simpler outside a tax shelter, but often have wider market spreads than the distributing versions.

Foreign domiciled OEICs also have Excess Reportable Income, regardless of whether they are the income or accumulation versions. Most of the Vanguard OEICs are now domiciled in Ireland. (Vanguard seems to do its best to hide the domicile.)

Vanguard Developed Europe ex UK is a UK domiciled OEIC.

[hokkaidobear]

Did you have a look here at the compilation on this on site

Bankeronwheels.com/best-ucits-etfs/

[raybarrow]

Hi Folks,
In the end I went for the Vanguard European Ex-UK fund. But I still have more to invest from my 23-24 Isa allowance as the year progresses.
Thanks for all the comments,
Ray

[raybarrow]

Hi,
In the end I went for Vanguard Europe Ex-UK for my first tranche of the 2024 ISA allowance.
Thanks for all the suggestions,
Ray.