Ireland has continued to pull ahead of Luxembourg as a domicile for European exchange-traded funds, recently released figures have shown.

Assets under management at Ireland-domiciled Ucits ETFs stood at $953trn, as of 31 December 2022, while those in Luxembourg amounted to $277trn, according to ETFbook. That was a year-on-year decline of -9% for Ireland and -17% for Luxembourg.

However, comparing the end of 2022 and the end of 2020, Irish AUM rose by 17%, while Luxembourg was flat. Comparing the end of 2022 and the end of 2018, Ireland was up by 124% versus 58% for Luxembourg. And comparing the end of 2022 with the end of 2016, AUM grew by 212% in Ireland and 142% in Luxembourg.

“Ireland and Luxembourg are two major European domiciles of choice for Ucits ETFs, with excellent expertise and experience in establishing and servicing broad range of funds across asset classes,” Pawel Janus and Bartlomiej Igla, ETFbook’s co-founders, wrote in a Linkedin .

“It is Ireland, however, that is clearly taking the leading position in terms of asset growth, attracting new fund promoters and thus new fund launches. The AUM in Irish-domiciled Ucits ETFs currently represents approximately 67% of the overall assets invested into Ucits ETFs.

“Part of that success derives from the Ireland/US tax treaty resulting in a net withholding tax rate of 15% on US dividend income, instead of 30%, that [the] fund is to pay. Given that dividend yield for S&P 500 Index is approximately 2%, this may result in 30bps of the annual tax saving of the fund,” Janus and Igla stated.

ETFbook is a research firm based in Switzerland that tracks the entire EMEA ETF marketplace, its co-founders said in a call with Delano.

Exchange-traded funds are mutual fund-like products that automatically track an index or type of financial asset, and can be bought or sold in real time on the stock market. Many investors put their savings in ETFs because they typically have lower management fees.