Pick the right ETFs, build wealth on autopilot
With over 10,000 ETFs available, knowing how to rank and select the right ones is essential. This guide covers every metric that matters — TER, tracking difference, AUM, replication, and domicile.
ETF Selection Metrics — What Actually Matters
| Metric | What It Measures | Good | Bad | Why It Matters |
|---|---|---|---|---|
| TER | Annual fund cost | < 0.30% | > 0.50% | Compounds against you for decades |
| Tracking Diff | Actual vs index return | Near 0 or positive | > -0.5% | More important than TER alone |
| AUM | Fund size | > €500M | < €100M | Small funds may close/delist |
| Replication | How index is tracked | Physical | Synthetic | Physical = actually holds the stocks |
| Domicile | Where fund is registered | Ireland | Luxembourg | Irish ETFs get 15% US dividend tax |
| Dist Policy | What happens to dividends | Acc (for growth) | Depends | Acc defers tax in many EU countries |
Top ETFs by Category for Europeans
🌍 Global Stocks (Core Portfolio)
| ETF | Index | Stocks | TER | AUM | Verdict |
|---|---|---|---|---|---|
| VWCE | FTSE All-World | 3,700+ | 0.22% | €12B+ | 🏆 Gold standard |
| IWDA | MSCI World | 1,500+ | 0.20% | €65B+ | Largest, most liquid |
| SPYI | MSCI ACWI | 2,900+ | 0.17% | €3B+ | Cheapest all-world |
🇺🇸 US Stocks
| ETF | Index | Stocks | TER | AUM | Verdict |
|---|---|---|---|---|---|
| CSPX | S&P 500 | 500 | 0.07% | €80B+ | 🏆 Cheapest large-cap |
| VUAA | S&P 500 | 500 | 0.07% | €40B+ | Vanguard alternative |
| EQQQ | NASDAQ-100 | 100 | 0.30% | €8B+ | Tech-heavy US growth |
🇪🇺 Europe & 🌏 Emerging Markets
| ETF | Index | TER | Region | Verdict |
|---|---|---|---|---|
| MEUD | MSCI Europe | 0.12% | Europe | Cheapest broad European |
| EMIM | MSCI EM IMI | 0.18% | Emerging | 🏆 Best EM exposure |
| IUSN | MSCI World Small Cap | 0.35% | Global Small | Small-cap diversification |
📊 Bonds
| ETF | Index | TER | Type | Verdict |
|---|---|---|---|---|
| AGGH | Global Aggregate Bond | 0.10% | Global bonds | 🏆 Best all-in-one bond |
| IEAG | Euro Aggregate Bond | 0.25% | EUR bonds | Euro-denominated only |
The Irish Domicile Advantage
🇮🇪 Why Irish ETFs Save You Money
Ireland has a tax treaty with the US reducing dividend withholding from 30% to 15%. For an ETF holding US stocks (which make up ~60% of global indices), this saves 0.2-0.3% per year in hidden costs. Over 30 years, this compounds to thousands of euros. Always prefer Irish-domiciled UCITS ETFs — look for "IE" at the start of the ISIN.
Building Your First ETF Portfolio
| Portfolio | Allocation | Blended TER | Complexity | Best For |
|---|---|---|---|---|
| One-Fund | 100% VWCE | 0.22% | ⭐ | 90% of investors |
| Two-Fund | 80% IWDA + 20% EMIM | ~0.18% | ⭐⭐ | More control over EM weight |
| Three-Fund | 60/20/20 stocks/EM/bonds | ~0.17% | ⭐⭐⭐ | Balanced risk/return |
| Four-Fund | 50/15/15/20 + Europe tilt | ~0.17% | ⭐⭐⭐⭐ | Home-bias preference |
💡 The Key Principle
Additional funds add complexity with diminishing benefits. The difference between a one-fund and four-fund portfolio over 30 years is likely small. The difference between investing and not investing is enormous. Start with VWCE. Add complexity later only if you want to.
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