What stock exchange do you use ?

[Julien]

Hi everybody,
I was wondering which stock exchanges you were using for ETFs and why?
I understand that it is best to choose the ones with the lowest bid-ask spread and the highest exchange volume. But how? Do some of you have hints to compare bid-ask spreads and daily volumes of specific ETFs over several exchanges ?

It may be quite straightforward for US ETFs in their home exchanges but as we have so many exchanges in Europe listing the same IE ETFs I wonder what are the bests and how to identify them ?

Also the fees of the different exchanges do not appear to be transparent at all.. any hints are welcome

 

[Julien]

For instance my Swiss broker offers me the embarrassing choice of the following options for some IE based ETFs :

Boerse Berlin

Boerse Stuttgart

Düsseldorf

ELECTR FUNDS

EPA Enext Paris

Euronext Amst.

Frankfurt

Gettex

Irish SE

LSE SETS

Muenchen SE

NASDAQ OMX

OTN (does that mean “over the counter” ?)

STU Fv TP2

SWX

Xetra ETF

"Best Execution"

 

[Baptiste Wicht]

Hi Julien

This is an excellent question and, indeed, a confusing one.

I have a few rules of thumb.

1. I would only recommend using one of the biggest stock exchanges when possible. This would exclude things like STU, OTN, ELECTR, ... Anything you have never heard of should be avoided.
2. I would only recommend the regional stock exchange. For instance, for an IE ETF, I would avoid NASDAQ and SWX
3. I prefer buying each ETF in the currency it holds. So, if the holding currency is USD, I would buy the ETF in USD. Sometimes, you can do differently to avoid currency fees.

After that, the stock exchanges make little difference.

• Usually, you can prefer a stock with high volume because it generally reduces the spread, and so improves your price.
• In some cases, you may want to use the stock exchange with the best fees, which may vary depending on your broker.