European Spotlight: ETFs in Spain eye growth beyond punishing tax regime

ETFs see green shoots of growth despite missing out on 'Trespasos'

Theo Andrew

Bolsa de Madrid Spain

Unfavourable tax policies have created significant barriers to growth for ETFs in the Spanish investment market in recent years, however, there are signs the ETF wrapper could be making a breakthrough.

Since January 2022, ETF investors have been unable to benefit from ‘Traspasos’ – a tax break for mutual fund investors that allows them to defer their capital gains tax when switching between funds – significantly eroding the product’s com-pounding ability within a portfolio.

The tax penalty has hindered the uptake of ETFs in the region – where the wrapper has one of the lowest penetration rates...

This article first appeared in ETF Insider, ETF Stream's monthly ETF magazine for professional investors in Europe. To read the full article, click here.


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