To leverage Ireland’s more tax-efficient environment for exchange-traded funds (ETFs), European asset manager Amundi is set to transfer two Luxembourg-based global equity ETFs into its Irish collective management vehicle (ICAV). The move is designed to benefit from Ireland’s lower withholding tax rate on dividends.
The ETFs undergoing this transition are the Luxembourg-domiciled Amundi MSCI USA ESG Leaders Select (SADU) and the Amundi S&P 500 ESG (S500). Both will be consolidated with their Dublin-based equivalents: the Amundi MSCI USA ESG Leaders UCITS ETF and the Amundi S&P 500 ESG UCITS ETF, which are sub-funds of the Amundi ETF Irish ICAV.
Scheduled for 15 September 2023, the re-domiciliation of Amundi MSCI USA ESG Leaders Select (SADU) will precede that of the Amundi S&P 500 ESG (S500), set for 18 October 2023. As of the 18th of September, the asset under management for these funds stood at €2.758bn and €3.984bn, respectively.
This shift is part of Amundi’s ongoing strategy to migrate assets to its Irish platform. The company had already moved its €643m MSCI World ESG Leaders Select ETF to Ireland in July. These latest transitions will bring the total number of Amundi’s Ireland-based ETFs to three.
A key incentive for Amundi’s relocation is Ireland’s advantageous tax treaty with the United States. Per the terms of the Ireland-US double taxation agreement, US equity ETFs based in Ireland attract a withholding tax rate of just 15% on dividends, substantially lower than the 30% rate applicable to ETFs domiciled in Luxembourg and other countries.
Delano asked Amundi for comment.