Polish vs Foreign Stock Exchanges — Where to Invest in 2026?
Comparison of GPW and foreign exchanges — performance, diversification, costs, taxes. Is it worth investing only on the Polish exchange, or better to focus on global markets?
9 min czytaniaHome Bias — The Polish Investor's Trap
Poles mainly invest on the GPW (Warsaw Stock Exchange). It's natural — we know Polish companies, it's easy to open an account, we don't worry about currencies. The problem is that the Polish exchange represents about 0.3% of global market capitalization. By investing exclusively on GPW, you're missing 99.7% of the global market.
This phenomenon has a name: home bias — the tendency to over-invest in the domestic market. It's one of the most common investment mistakes worldwide.
Performance — GPW vs the World
Historical Returns (10 years, to 2025)
| Index | Average Annual Return | Currency |
|---|---|---|
| WIG (Poland) | ~6% | PLN |
| S&P 500 (USA) | ~12% | USD (~14% in PLN) |
| MSCI World (world) | ~10% | USD (~12% in PLN) |
| MSCI Emerging Markets | ~4% | USD |
The Polish exchange systematically underperformed developed markets — especially the USA. This doesn't mean it will always be so, but the trend is clear.
Why Did GPW Perform Poorly?
- Index structure: WIG is dominated by banks, energy, and state-owned companies. Lack of global tech leaders
- Capital outflow: pension funds (OFE) were shrinking, less money flowing to GPW
- Political risk: frequent regulatory changes, sector taxes
- Small and medium companies: mWIG40 and sWIG80 performed better than WIG20, but liquidity is limited
Diversification — Why It's Crucial
By investing exclusively on GPW, you're exposed to:
- Country risk: Poland's economic problems affect both GPW and your salary simultaneously
- Sector risk: GPW is dominated by finance and energy
- Currency risk (reverse): if PLN loses value, your foreign assets gain. But if you have everything in PLN — you lose purchasing power
Global diversification means your portfolio isn't hostage to one country, one currency, and a few sectors.
How to Invest Abroad from Poland?
ETFs on European Exchanges
Simplest way — you buy ETFs listed on Xetra, Euronext Amsterdam, or LSE through a Polish broker:
- XTB: 0% commission (up to limit)
- Bossa Zagranica: 0.29% commission
- mBank DM: 0.29% commission
- DEGIRO: low commissions
Popular ETFs:
- VWCE — entire world (Vanguard FTSE All-World)
- IWDA — developed countries (iShares MSCI World)
- CSPX — S&P 500 (iShares)
ETFs on GPW
For several years, Polish ETFs have been listed on GPW:
- Beta ETF WIG20 — Polish blue chips
- Beta ETF S&P 500 — US exposure, listed in PLN
- Beta ETF MSCI World — global market
Advantage: you buy in PLN on GPW, no need for foreign account. Disadvantage: higher TER and lower liquidity than originals.
Costs of Investing Abroad
| Cost | GPW | Foreign Exchanges |
|---|---|---|
| Commission | 0–0.39% | 0–0.29% |
| Spread | Depends on liquidity | Low (large ETFs) |
| Currency conversion | None | 0.2–0.5% (PLN→EUR) |
| ETF TER | 0.30–0.50% | 0.07–0.22% |
| Dividend tax | 19% (PL) | Country-dependent + DTT |
Currency conversion is an additional cost, but lower TER of foreign ETFs more than compensates for it long-term.
Taxes — Notes
Foreign Dividends
Dividends from foreign ETFs may be subject to double taxation:
- Withholding tax at source (e.g., 15% in Ireland — headquarters of most UCITS ETFs)
- Tax in Poland: 19%, with foreign tax credit
In practice, accumulating ETFs (e.g., VWCE, IWDA) — don't pay dividends, so there's no withholding tax problem. Profit is reinvested within the fund.
PIT-38
You settle gains from foreign ETF sales in PIT-38. Most brokers (XTB, Bossa) generate PIT-8C automatically.
Arguments for GPW
- Simplicity: no currency conversion, Polish-language platforms
- Company knowledge: easier to analyze companies you know
- Growth potential: GPW is undervalued — low P/E ratios may indicate potential
- Dividends: Polish dividend companies (PKN Orlen, PZU, Kęty) offer attractive dividend yields
- No currency risk: you invest in PLN
Arguments for Foreign Exchanges
- Diversification: exposure to 3,700+ companies from around the world
- Higher historical returns: developed markets beat GPW
- Access to tech leaders: Apple, Microsoft, NVIDIA — unavailable on GPW
- Lower ETF costs: 0.07% vs 0.30%+
- Currency protection: PLN weakening = increase in foreign asset value
Optimal Strategy
You don't have to choose — combine both markets:
- 80% global ETFs (VWCE or IWDA + EMIM) — portfolio core
- 20% GPW — Polish exposure (Beta ETF WIG20 or selected dividend companies)
This proportion provides global diversification with local accent. You can adjust it — important that GPW doesn't constitute 100%.
Summary
| Criterion | GPW | Foreign Exchanges |
|---|---|---|
| Diversification | Low | Very high |
| Historical returns | Moderate | Higher |
| ETF costs | Higher | Lower |
| Simplicity | High | Medium |
| Currency risk | None | Yes (but also protection) |
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