Best ETFs for European Investors (2025)

I did my best to research and compare what I consider to currently be the best ETS for European investors after all picking the right ETF to invest in can be very overwhelming especially at the beginning of your investing Journey my wife and I were in the same situation 8 years ago and when looking back today we're very grateful we didn't let that stop us from getting started no matter if you're looking to buy an S&P 500 MCI World foty o small ktf or you're following a different strategy I'm confident you're going to learn something useful from this video by the way I decided to only focus on physically replicating ETFs which directly hold the stocks of the index they're tracking and not synthetic ones which replicate the index performance through swap contracts as those come with additional counterparty risk I'll also only mention accumulating ETFs which automatically reinvest dividends from the stocks they hold into more shares of the stocks in the index that's because accumulating ETFs are more tax efficient in most European countries and I don't want to make this video even longer than it needs to be you're of course free to do things differently and you'll easily be able to find their Distributing counterparts using my favorite research tools for ETF investors chances are you may have learned about investing on an American YouTube channel or blog only to then be disappointed that you can't buy that same us-based ETF as a European resident due to regulations luckily in most cases you simply need to find a version that's domiciled in Europe using websites like just etf. com you can then find it using a European broker of choice either via its isin number or its Stock Exchange ticker at the bottom of the page speaking of that you can find my favorite Locust brokers in Europe for ETFs linked down below which is a great way to support me if you'd like to just ETF can also be useful to compare the performance of different ETFs as long as you keep one thing in mind when making comparisons set the date back at least one week instead of picking the current day to get more accurate data I also like to use fonts web as a second source which is sadly only available in German When comparing ETF returns tracking differences. comom is another useful resource to check how closely ETFs have been tracking their index over time in this case a negative value means the ETF outperformed its underlying index World ETFs outperforming their index is something that's completely normal by the way because ETFs domiciled in Ireland pay a lower 15% withholding tax on us dividends internally while the index comparison always assumes a worst case withholding tax of 30% ETFs can also generate additional returns by lending out some of the stocks they hold against collateral something I looked at in detail in another video you can watch afterwards to get the most current and most accurate index tracking data possible you can look up each ETF on fund issuers websites directly for example Vanguard ey shares or spider that's exactly what I did for today's video since I wanted to provide you with information that's as up toate as possible and the last resource I need to mention is back test by kurvo here you can create a portfolio and see how it performed over a specific period for example here you can see that a theoretical €1,000 invest investment in the MSI World index in December 1978 would have turned into almost €1 1 million by December 2024 or the recurring investment of €1,000 every month since then would have turned into over 8 million of course we're only looking at the past year and there's no guarantee the same is going to happen in the future even still it shows you how Investments can compound over long time periods and in my opinion looking at long-term charts like this also helps you zoom out and put things into perspective when markets are down and it feels like the world is about to end when once again all right it's finally time to look at what I consider to be the best ETFs right now for European investors we'll go over each index and the best ETFs for it starting with the most popular one which accumulate the most funds in Europe so far which means we need to start with the S&P 500 Index covering the 500 largest publicly listed companies in the US and I get it if you're going to bet on stocks from a single country based on over 100 Years of stock market data it might as well be the US I personally still prefer in ing globally via all World ETFs as I don't like the idea of putting all my eggs in a single Basket in this case only stocks based in the United States but I'm certainly not here to judge anyone that picks this route for whatever reason in fact here's a recent video of mine you can watch afterwards which may help you with your own decision after lowering its fees to only 0.

03% per year the spider S&P 500 is a current champion as far as internal cost go at plus 0. 22% compared to its index it also had the best tracking difference in 2024 4 compared to Plus 0. 19% for the ishares core S&P 500 and plus 0.

18% for the Vanguard S&P 500 that's not to say that either of the two Alternatives I just mentioned are bad by any means as the difference is minimal I'm simply mentioning the one I would pick as a European investor if I was looking for an S&P 500 ETF today now what if you change your mind and you decide that you want to add international stocks from developed countries outside the US later on or maybe you simply want to have full control over how much you allocate to the US and stocks based in other countries after all US Stocks now make up more than 70% of the MCI world based on their market cap that's where some new ETFs covering the MSI World xusa index come in with this one by X trackers being the one I would currently pick based on its size and fees all of a sudden the decision of how much you allocate to US stocks and the rest of the world is completely up to you I could imagine something like this for example 60% US Stocks using the spider S&P 500 ETF and 40% other developed count stocks using the trackers MCI World xusa ETF with a combined total expense ratio of only 0. 078% you even managed to reduce your yearly holding fees compared to the least expensive MSR World ETFs out there which start at 0. 1% per year next we have the popular MSI World and Other indices covering developed markets first the best known of the bunch the MSI World containing a total of 1,395 stocks the very similar solo active GBS developed markets large and midcap with 1,4 31 stocks and the footsie developed index containing its many as 2016 stocks while the first two are quite similar in what they cover the footsie developed is a bit broader as it also includes stocks from South Korea and Poland as well as some stocks with a smaller market capitalization as a result if I was looking for a single ETF to cover develop markets I would have a slight personal preference for the footy developed World by Vanguard which luckily also had an excellent index tracking difference over the past 5 years that's not to say that an MSI World ETF is a bad choice by any means in in fact the difference between the two indices is likely going to be minimal over long time periods and if I was looking for an MSI World ETF myself I would currently pick the one by spider with a total expense ratio of 0.

12% and an outstanding tracking difference over the past few years meanwhile they only have a single option covering the relatively new selective GBS developed markets index the amundi prime Global with an impressively low total expense ratio of only 0. 05% per year the ETF moved its domicile to Ireland after being based in Luxembourg for the past few years years which should now make it more competitive to other world ETFs since the Luxembourg domicile resulted in higher withholding taxes on us dividends having said that we still need more data on its index tracking difference after having been relaunched so I would wait a year or two to see how it does also in comparison to MSI World ETFs which it's trying to compete against one more thing you should know is that the French asset management company amundi is actually applying sort of a light ESG filter to its prime Global ETF something that should more clearly disclose on website in my opinion this means they're not simply passively replicating the underlying index as is the case with spider ey shares or Vanguard but actually excluding companies from sectors they don't like one such exclusion is lockit Martin the 117th largest stock in developed markets as you can see here in spiders MSA World which is part of a Mundi underlying index but completely missing from its ETF I didn't have time to check what other stocks from its index were excluded on purpose and I also understand investors that don't mind the exclusion of certain kinds of companies but it still means the ETF is deviating from a simple passive index investing approach and whoo say they're not going to tighten these rules further in the future excluding additional companies simply because they don't agree with how the French asset management company sees the world sadly amundi has not build the best reputation lately due to how often they've merged funds moved their domicile which can be a tax nightmare in some countries or how they've changed funds to suddenly track an ESG version of the index later on sometimes even increasing its fees like in example hopefully they stop doing this in the coming years but all of this is why I personally feel better with funds issued by American asset management companies like Vanguard Invesco spider or Black Rock AKA I shares now let's look at ETFs that are actually investing globally covering both developed and Emerging Markets here we have the msci all country World index with 2,647 stocks the msci all country world investable market index with 8,640 stocks the footsy O World covering 4,247 companies and the so active GBS Global markets with 3,435 stocks as it stands a single Global ETF is my preferred way to invest longterm as it enables me to not only cover stocks from developed markets but also from promising Emerging Markets like India via a single fund I never want to ask myself in a decade or more if I made the right decision by excluding specific regions as it's impossible to know beforehand which country stocks are going to perform best in the future that's why my wife and I invested most of our monthly savings into futsi o ETFs over the past 8 years but that's just my personal preference you have to decide for yourself which strategy you're the most likely to stick to for the long term and these are what I believe to currently be the best ETS for this strategy depending on the index you pick the I shares Maci all country world comes with a total expense ratio of 0. 2% per year and a solid tracking difference since 2021 in fact it outperformed its underlying index for three out of the last four years I'm not looking at its tracking difference before 2021 on purpose since that was its first full year with a reduced yearly fee of 0.

2% the spider MSI all country world could be an even better option to cover this index ever since it reduced its to expense ratio from 0. 4 to 0. 12% per year last August looking at its tracking difference during the last few years when its fees were still 0.

28% higher I wouldn't be surprised to see it outperforming the ey shares ETF going forward at least until I shares doesn't lower its TR further as well if you want to go even broader the spider msci all country World investable Market ETF is a great option with an expense ratio of 0. 17% which even includes small cap stocks based on a market cap in the underlying index its tracking difference could be better and more predictable though just looking at the past 5 years we've seen everything from a 0. 9% index under performance in 2020 to 0.

88% outperformance in 2022 hopefully it's going to improve as it grows the number of stocks it holds compared to the underlying index honestly I would be just fine holding either of the three ETFs I just mentioned long term but I still have a personal preference for the Foie oal for the longest time the Vanguard futti oal was the only one my wife and I were buying on a mty b and it's still an excellent pick with a solid tracking difference that's very close to the index that being said due to vanguard's reluctance to finally lower it's now comparatively High fee of 0. 22% per year my wife and I started buying the Invesco fzi oal with a 31% lower total expense ratio of 0. 15% in July instead just to clarify we're still holding on to existing Banger shares which are nicely in profit for tax reasons until we actually need the money for example in retirement inco's tracking difference has also been excellent so far beating the index by 0.

4% % in 2024 and 0. 42% so far since its launch in mid 2023 last but not least we have the new amundi Prime all country world with its impressively low fee of 0. 07% per year covering the selective GBS Global markets index the ETF launched less than 11 months ago in its Distributing version which has grown quickly in size but the accumulating version which came out 4 months later is still sitting at an a of less than 100 million which means it likely comes with much higher spreads when buying and selling due to lower liquidity we still need to wait and see how Clos this amundi ETFs track their underlying index as well since they're still so young and haven't made it to a full calendar year yet sadly amundi is once again excluding specific companies from sectors it doesn't like here as well something I already mentioned with the amundi prime Global in the previous section of this video that in addition to how often the French fund provider burned ETF investors in the past via ESG conversions and fund mergers is why I personally didn't even consider this one when I was looking for a new ETF for my one ETF strategy and went with Invesco instead but there of course free to do things differently this is simply my personal opinion I was also happy to see that the Invesco FS o managed to slightly beat its performance so far which goes to show you that fees aren't the only thing we should be focusing on having said that this could of course change any time so it will be interesting to compare these ETFs long term now what if you want to add or increase your exposure to stocks from emerging markets for example you could add 10% Emerging Markets to a world ETF to get closer to an old country world or footy old ETF yourself based on current market caps in order to avoid stocks overlapping between ETFs I would currently pick the I share's core MSI Emerging Markets investable Market ETF if you're mixing it with the MSI world and the Vanguard footy Emerging Markets if you want to add it to a footy developed World ETF next we should also cover smaller companies better known as small cap stocks these generally carry more risk and are more volatile but they have historically outperformed large and midcap stocks over longtime Horizons that being said there's obviously no guarantee that's going to be the case going forward as well and they can also underperform over a decade or more in fact they slightly underperformed on a aage the past 20 years one option to have exposure to small cap stocks is by simply picking the spider Mai all country World investable Market ETF I already mentioned as a 1 ETF solution which already includes small cap stocks according to their market cap in the index which in case you're wondering is currently hovering around 10% and option number two is adding a small C ETF for example with an allocation of 10 to 15% to a world ETF like the MSI World foty o or MSI all country World here my first pick would be the I shares MSI World small cap containing a total of over 3,300 small stocks with an impressive tracking difference over the past four years the newly launched Avantis Global small cap value ETF could also be an interesting option to look at just keep in mind it only launched in September so it's still very new and has a relatively small fund size of $140 million for now it will be interesting to see if it manages to outperform the I shares MSI World small cap over a long time Horizon with its more active approach and greater waiting on companies with low valuations and high profitability last but not least what if you want to increase your allocation to European stocks perhaps apps you believe that European companies deserve a higher waiting than the 13.

7% they currently make up in all ETFs or the 14.