Amundi is continuing to transfer Exchange Traded Funds (ETFs) with exposure to U.S.-based companies from Luxembourg to Ireland. A significant part of this migration, involving €6.58 billion across two ETFs, was announced last week.
The latest Luxembourg-domiciled Amundi ETFs to make the move are the €3.98 billion Amundi S&P 500 ESG UCITS ETF and the €2.59 billion Amundi MSCI USA ESG Leaders Select ETF. They are being merged into equivalent ETFs structured in Ireland under an Irish collective asset management vehicle (ICAV), according to Amundi, Europe's largest asset manager.
Investors throughout Europe were notified about the transition via a series of 60 investor notices published on the Amundi website on September 11. These notices, approved by Luxembourg regulator CSSF, state that the relocation of the ETFs is part of an "ongoing review of product range competitiveness and client interest assessment."
Dublin now Europe’s primary ETF hub
Dublin is becoming increasingly prominent as Europe's primary ETF hub, largely due to Ireland's tax treaty with the U.S. Amundi is gradually replicating its €15 billion portfolio of Luxembourg-domiciled ETFs in Ireland with the intention of consolidating these funds with their Luxembourg-domiciled counterparts. The transition also means the funds become subject to supervision by the Bank of Ireland, which acts as national financial regulator on the Emerald isle.
Irish-domiciled ETFs holding U.S. equities are subject to a 15% withholding tax rate on dividends, compared to the 30% rate for ETFs domiciled in Luxembourg and other European jurisdictions.
Amundi representatives did not respond to requests for comment.
In July, the firm merged its Amundi MSCI World ESG Leaders Select UCITS ETF with the Amundi MSCI World ESG Leaders UCITS ETF. According to Ignites Europe, Amundi plans to move several more Luxembourg-based ETFs to Ireland, including its MSCI World SRI Climate Net Zero Ambition PAB UCITS ETF and others.
A report by Investment Officer in June highlighted that Ireland has solidified its status as the largest international ETF domicile, putting competitors like Luxembourg in a position of catch-up. However, some Dublin-based fund experts believe that Luxembourg still has appealing options, particularly its flexibility with listed and unlisted asset classes and its strength in fixed income funds.