PRIIPs KIDs Problem: ETF Investment Ban for Small EU Countries – What’s Happening?

Being here probably means that you are one of the thousands of investors in VUAA, VUSA and VWCE through DEGIRO, and now you no longer can make any additional investments. Am I right?

Don’t worry, you are not alone! We’re all screwed…

Our dear European bureaucrats from Brussels, attempting to protect us, have… messed up!

With the recent change in European PRIIP legislation, brokerage platforms are not allowed to offer ETFs that are not accompanied by the KID document translated into the local language to retail investors.

What is a KID (Key Investor Document)? It is a document that contains key information about an ETF and is available to investors. Through it, they can get insight into where the ETF invests, the level of risk it takes, past performance, etc.

What does this mean?

If the ETF administration company fails to translate this document into the local language, investment platforms cannot trade it on that market.

Subsequently, popular ETFs in which many people invested (such as VUAA, VUSA and Vanguard’s VWCE) are no longer available in small European countries such as Chezh Republic, Greece and Slovenia.

Unfortunately, fund administrators choose not to deal with small markets, so this document remains untranslated, therefore it cannot be sold in these markets.

In today’s article, you will read:

• How to overcome the problem? →
• Alternative to investing in VUAA/VUSA →
• Alternative to investing in VWCE →
• How do I open an account with Irish DEGIRO? →

How can you overcome the problem of PRIIPs?

You have two alternatives:

• Bypassing the legislation →
• Finding an alternative compliant solution →

#1 Bypassing legislation

You can bypass European legislation and buy ETFs not accompanied by a translated KID in your local language.

You can do this in two ways:

Option #1: Some platforms, such as Freedom24, continue to offer all ETFs without restricting access to anyone. This means that VUAA, VUSA, VWCE and many more ETFs remain available to be purchased without any restrictions.

Are they choosing to bypass the legislation? Are they choosing to ignore it? Is there any additional risk with this move? I don’t know.

Option #2: On other platforms, you can bypass the ban if you create an investment account under another platform branch, specifically one in an English-speaking country.

For example, if you open an account under the Irish DEGIRO, you can access all ETFs.

How do I open an account with Irish DEGIRO?

The process is simple:

1. Log in to Degiro.ie
2. Create an account using exactly the same personal details as your local account (email, VAT, name, address, etc.)
3. Tadaaah! Now you are granted access to all ETFs!

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What happens to the ETFs you already purchased from your local account at DEGIRO?

There are three solutions:

1. Hold them: As you are not forced to sell, you can continue holding your positions in the local account and achieve greater diversification – on the trading platforms level. Any new purchases can be made from the Irish account.
2. Sell them: You liquidate all your positions, withdraw the money to your bank, send it to the new Irish account and buy the same products again. This way you will have to pay some trading and bank transfer commissions, and you will need to make the corresponding amendments to your tax return.
3. Transfer internally: You can contact DEGIRO (via mail) and request an internal transfer of your assets with a corresponding request. There is a fee of €7 per position (not per piece). To proceed, the personal details of the new account must be identical to the old account.

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#2 Alternative solutions

And by alternatives, I mean choosing ETFs whose fund administration companies have issued corresponding KIDs to your local language and can be traded as normal.

Unfortunately, you won’t find the most popular options like VUAA, VUSA and VWCE, but… I have some better alternatives for you!

Luckily for us, the market always tends to fill any gap arising, so there are alternatives.

• VUAA/VUSA alternative →
• VWCE alternative →

How do I invest in an alternative to VUAA?

Xtrackers (DWS), a fund manager from Germany, created a similar ETF to VUAA in 2022. It’s called S&P 500 UCITS ETF and… guess what… it successfully tracks the S&P500 index! You can find it under the ticker symbols of XDPU (or XDPC, XDPE, XDPG).

Is it better than VUAA?

1. It’s cheaper: the VUAA has annual management fees (TER) of 0.07%, while the XDPU has only 0.06%.
2. It has a lower price: Without being a substantial advantage, a lower price enables investors with smaller amounts of initial investment capital to acquire it.
3. It is compliant: it is available to retail investors from small countries and can be found on Saxo Bank’s platform.

You will find it available on 4 stock exchanges:

1. 🇬🇧 London with ticker: XDPG and ISIN: IE00BM67HX07 in GBP
2. 🇨🇭 Zurich with ticker: XDPC and ISIN: IE00B8KMSQ34 in Swiss francs (CHF)
3. 🇩🇪 Frankfurt with ticker: XDPE and ISIN: IE00BM67HW99 in Euro (EUR)
4. 🇮🇹 Milan with ticker: XDPU and ISIN: IE000Z9SJA06 in Euro (EUR)

Where to buy it from? You’ll find it available at Saxo Bank’s investment bank, and you’ll get the lowest fees if you choose the Milan or Frankfurt stock exchange. See, step by step, how to invest →

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How do I invest in an alternative to VWCE?

Two possible alternatives:

1. MSCI World UCITS ETF 1C from Xtrackers with Ticker: XDWD and ISIN: IE00BJ0KDQ92
2. MSCI AC World ESG Screened UCITS ETF 1C from Xtrackers with Ticker: XMAW and ISIN: IE00BGHQ0G80

What is my opinion?

The new rule doesn’t make any sense to me!

Were we waiting to read the translated KID document to avoid making investment mistakes? Is this what will prevent someone from gambling their money?

After all, give me the option to take responsibility by agreeing that “Yes, I can read English and am OK to take the risk that goes with some of the more heavily regulated investment vehicles like ETFs”.

Three things in my mind:

1. The administrative companies do the translations
2. The legislation changes
3. We’re proceeding as is…

Frequently Asked Questions

Here are some of the most frequently asked questions on the internet about the problem of PRIIPs and ETFs in DEGIRO:

VUAA in DEGIRO: Can I buy it?

As it stands now, Vanguard’s ETF VUAA, is unavailable to investors that come from small EU countries due to the untranslated KID document. You can purchase the ETF by creating an account at DEGIRO.IE →

VWCE at DEGIRO: Can I buy it?

No, Vanguard’s VWCE ETF is unavailable to investors from small countries through DEGIRO due to the untranslated KID document. You can purchase the ETF by creating an account with Irish DEGIRO →

Is there an alternative to VUAA and VUSA?

Yes. Take a look at the S&P 500 UCITS ETF from Xtrackers (DWS). It tracks the S&P500 index, is cheaper than VUAA, and you’ll find it with the ticker symbols of XDPU (or XDPC, XDPE, XDPG). You can find it at Saxo Bank →

Is there an alternative to VWCE?

Yes. Take a look at the MSCI World UCITS ETF 1C (XDWD and ISIN: IE00BJ0KDQ92) and the MSCI AC World ESG Screened UCITS ETF 1C (XMAW and ISIN: IE00BGHQ0G80) from Xtrackers. You can find both at Saxo Bank →

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More to read on ETFs:

If you want to read more about ETFs (and beyond), take a look at the articles below:

Don’t forget that investing involves risk. You may lose part or all of your fortune.

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