Amundi, one of the leading asset managers in Europe, has strategically relocated its third-largest exchange-traded fund (ETF) from Luxembourg to Ireland. This decision underscores Ireland's growing dominance as a preferred domicile for ETFs, attributed to favorable tax regulations and burgeoning market share. The relocated ETF boasts total assets of €6.7 billion, marking a significant shift in Amundi's operational strategy.
Ireland and Luxembourg are the two most popular European domiciles for ETFs. However, Ireland has been steadily gaining ground on Luxembourg in recent years. At the start of 2025, Ireland was home to an impressive €1.6 trillion of ETF assets, accounting for around 70% of the European ETF market share. In contrast, Luxembourg housed €387 billion in ETF assets, representing approximately 18% of the market.
A key factor driving this shift is the difference in withholding tax rates on US dividends. ETFs domiciled in Ireland benefit from a reduced 15% withholding tax compared to Luxembourg's 30%. Amundi highlighted this advantage, stating:
“Ireland offers significant advantages for ETFs investing in US equities, primarily due to reduced withholding tax on dividends” – Amundi.
The introduction of semi-transparent ETF rules also plays a crucial role in this transition. These rules allow fund managers to maintain a level of secrecy about their funds, which can protect investors from competitors. Luxembourg was the first European country to permit semi-transparent ETFs, setting a precedent that other jurisdictions are now following.
Kenneth Lamont, a principal Morningstar analyst, emphasized the market's inclination towards Ireland as a domicile for active ETFs:
“The market has shown a clear preference for Ireland when launching active ETFs, which are expected to drive growth in new ETF launches in the coming years,” – Kenneth Lamont.
Lamont further noted the potential for innovation within the region:
“The first tokenised UCITS fund is set to launch in the region soon too" – Kenneth Lamont.
In addition to relocating the ETF, Amundi reaffirmed its commitment to the UK market by listing 11 ETFs on the London Stock Exchange. This move highlights Amundi's strategic focus on expanding its presence and influence across key European financial hubs.
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