We show you the REIT ETF that you can buy in Europe which is also a UCITs fund.
There are a many global ETFs for Europeans. We show you the best global ETF that you can buy as a European. We also show you the 7 important requirements for picking a good ETF for Europeans.
After having researched 21 global UCITs ETFs we have found what we consider the best ETF suited for most European investors.
So what is the best global ETF for Europeans (UCITS)?
The best global ETF for most people is Lyxor Core MSCI World (DR) UCITS ETF (Acc), ISIN: LU1781541179.
There are other global ETFs for Europeans, but there is really only a handful that is worth considering.
Why should you choose Lyxor Core MSCI World?
When you pick a good ETF as a European you need to look at 7 things:
- The expense ratio for the ETF needs to be low. The expense ratio is always expressed as a percentage. The rate denotes how much of your total investment in that ETF that you need to pay the provider of the ETF. This should be below 0.30% and preferably lower than that.
- The ETF should invest passively. It should follow a well-established index from a reputable provider like MSCI or FTSE. Passively managed funds typically beat actively managed funds on expenses and investment returns.
- The ETF needs to be highly liquid. This means that the difference between the buy and sell price (bid/ask) for the ETF is small. This is called the price spread.
- The ETF needs to have a large number of assets under management. This is abbreviated as AUM. This guarantees that the ETF doesn’t close in the near future and is also an indicator of low price spreads.
- The ETF needs to follow its index without a large tracking error. If the ETF has a large tracking error compared to its index we are not getting what we are paying for. A large tracking error is also an indication that the ETF is executing poorly on its replication of the index that it is tracking which is not desirable.
- The index that the ETF tracks needs to represent and replicate the desired asset class with high fidelity. This means we expect a large-cap growth ETF to contain only large-cap growth stocks and continue to do so without style drift.
- The ETF needs to be UCITS approved. This is a European regulation that enables you to buy the ETF in Europe.
When you are comparing the 7 requirements to each other the most important thing to focus on is the expense ratio, as that is the most reliable indicator of how well the ETF will perform in the future.
The Lyxor Core MSCI World ETF fulfills all the above requirements. It is cheap. It tracks a global index with little tracking error. It is highly liquid with a large AUM.
What is the historical return of global stocks?
Here is the historical return of global stocks.
Portfolio data was last updated on 11th of August 2023, 08:35 ET
|Period||Global Stocks (%)|
|CAGR since 1989||7.22|
|CAGR 10 years||8.18|
|CAGR 5 years||5.31|
|CAGR 3 years||4.18|
Here is what the table is showing you
Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.
10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.
CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.
Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.
Yield: This is the expected dividend yield of the portfolio.
Please note that past performance is not a guarantee of future returns.
How does a basket of the world stocks compare to the best portfolios?
Below you can see the returns of the best portfolios that we have benchmarked.
|Name||See Portfolio||Year to date||Return in 2022||10 year return||CAGR since 1989 (%)||Draw Down|
|Ben Stein Retirement||Coming soon!||4.05||-18.03||9.46||10.8||-35.42|
|Paul Merriman 4-Fund-Portfolio||Coming soon!||9.22||-11.98||11.25||10.38||-35.26|
|S&P 500||Coming soon!||17.09||-18.19||12.52||10.28||-37.63|
|Paul Merriman Target Date Portfolio (25 year old)||Coming soon!||6.63||-13.08||8.28||10.2||-36.46|
|Scott Adams Dilbert Portfolio||Coming soon!||10.87||-18.75||7.0||10.19||-44.88|
|JL Collins, Simple Path To Wealth, Wealth Building Portfolio||Coming soon!||16.6||-19.51||12.08||10.19||-37.0|
|American Institute of Individual Investors (AAII) Portfolio||Coming soon!||3.74||-13.91||9.7||10.16||-40.85|
|Paul Merriman Target Date Portfolio (35 year old)||Coming soon!||6.57||-13.22||8.31||10.08||-36.35|
|Assetbuilder.com Portfolio 14||Coming soon!||6.95||-16.94||7.59||9.99||-37.91|
|Balanced Portfolio 90/10||Coming soon!||14.83||-18.87||11.03||9.84||-32.78|
What are global stocks?
Global stocks is the broadest asset class. It includes stocks from all around the world.
There are 2 widely followed indices that track global stocks.
- MSCI World Index. This invests in stocks from 23 developing countries.
- MSCI ACWI (All Country World Index). This invests in 23 developing and emerging markets.
The MSCI ACWI is broader because it invests in emerging markets in addition to developing markets.
What other global ETFs should you consider as European?
There are many global ETFs. In addition to the requirements listed above, you need to keep a keen eye on the index that the ETF used for tracking.
It is typically best to stick with established index providers such as MSCI, S&P, FTSE, Morningstar, and CRSP.
In the following, we have listed what we consider some good alternatives to Lyxor Core MSCI World.
- Lyxor Core MSCI World (DR) UCITS ETF, ISIN: LU1781541179. This super cheap ETF tracks the MSCI World index. Our favorite ETF for global exposure to stocks.
- iShares MSCI ACWI UCITS ETF USD (Acc), ISIN: IE00B6R52259. This ETF tracks the broad All-Country World Index (ACWI).
- Lyxor MSCI World ESG Trend Leaders (DR) UCITS ETF, ISIN: LU1792117779. This ETF is an ethical global ETF.
- Xtrackers MSCI World Quality UCITS ETF, ISIN: IE00BL25JL35. This ETF is a global smart-beta ETF.
How do I build a great portfolio with ETFs?
A high-performing portfolio is constructed by combining different asset classes. If you want the market return you should buy one ETF such as the Lyxor Core MSCI World. You don’t need anything else.
If you want a shot at outperforming the market you need to apply the following recipe to your investing strategy.
- Start with adding a broad US-based stock ETF.
- Then, add exposure to international stocks. This is usually divided into developed countries and emerging markets. Developed markets include Europe, Canada, Japan, Australia, and small parts of Asia. Emerging markets include Eastern Europe, Africa, most of Asia, and South America.
- Then tilt (overweight) your portfolio towards high performing asset classes like value and small-cap. Value stocks and smaller stocks have historically outpaced larger growth stocks. This has not been true in the past 10 years.
What is the best ETF for US stock to buy for Europeans?
The best ETF for US stock to buy for Europeans is Vanguard FTSE North America UCITS ETF. The ETF is available as distributing and accumulation.