This is the ETF I would choose then : iShares Core MSCI World UCITS ETF
Mostly because it is in Euro (makes it easier for me probably also because I will stay in Eurozone forever probably ;-) )
Second thing is that like I can read it's accumulating and not paying dividend. Important for me because we have a double tax on dividend here in Belgium of 2 x 25 %.
Ter is also 0,20 so okay.
Is this ETF broad enough to take as only ETF? It's heavily weight in the US like you can read here :
(if other suggestions please let me know, would be very helpfull!)
Geschiktheid
The iShares Core MSCI World UCITS ETF provides exposure to many of the largest publicly-traded companies in the developed world. It is best used as a core building block for investors who want to gain developed equity exposure through one fund rather than build a geographically- and/or sector-diversified equity portfolio. Although the underlying MSCI World Index has a broad geographic scope, it is heavily concentrated in the US.
The MSCI World Index is made up of global companies. Still, investors seeking exposure to the global- rather than just developed- equity market should consider pairing this ETF with some form of emerging markets equity exposure which would provide portfolio diversification.
This ETF does not pay dividends and therefore may not suit income-seeking investors.
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Overzicht
Valuations around the world have improved significantly since the 2008 financial crisis. The US- by far the ETF’s largest country exposure- has experienced a steady economic recovery over the last few years. With the S&P 500 and Dow Jones Industrial Average reaching their all-time highs in Q1 2015, the financial market nosedive in 2008 seems like a distant memory.
The US is in the midst of its longest— and slowest— economic expansionary period since World War II. And the expansion doesn’t show signs of stopping in the short-term, with unemployment staying comfortably under the FOMC’s 6.5% target, and inflation remaining below the Fed’s 2% target.
By contrast, the Eurozone recovery, though improving, remains fragile, with inconsistent economic performance across the continent. Domestic demand is still constrained by lack of available credit and high unemployment. Nevertheless, the weak euro and the fall of commodity prices – particularly energy - has alleviated some fears about Europe’s economic prospects, providing support both to consumers and exporters.
In order to reflate the economy and address the rising risks of a deflationary spiral, the European Central Bank (ECB) embarked on full-fledged Quantitative Easing (QE) in January 2015. The ECB’s combined actions, namely QE, comprehensive liquidity provision and the commitment to keep interest rates at zero for a prolonged period, are primarily aimed at kick-starting bank lending to SMEs and boosting domestic demand.
Across the channel, the UK has experienced a firm recovery. Strong domestic demand has helped support the UK’s economic expansion while the Bank of England has retained an ultra-loose monetary policy stance. Interest rates have remained at a record low of 0.5% since March 2009, although financial markets are already positioned for an increase in rates in late 2015 or early 2016. The consensus is that the UK economy should continue to grow at a healthy pace.
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Constructie van de index
The MSCI World Net Total Return Index is a free-float market capitalisation-weighted index covering 23 developed countries around the world. The index consists of about 1,600 large- and mid-cap stocks, and covers approximately 85% of the total free float of the component markets. The index is reviewed quarterly, with size cut-offs recalculated semi-annually. The universe is initially screened for liquidity, as measured by the value and frequency of trading. The median constituent has a market capitalisation of $8.7 billion. The index is heavily tilted towards the US, whose weighting of 52-56% is more than five times larger than the next highest representatives, Japan and the UK, with weights of 7-10% each. The eurozone countries make up 15-19% of the total weighting. On a sector basis, the index is broadly diversified. The top weight is financials, which makes up 18-22% of the total, followed by information technology, consumer discretionary and health care at 11-13% each. There is very little portfolio concentration, with generally no more than 10% of the index within its top 10 names. The top individual position is Apple, with a 1-3% weight, followed by Microsoft and General Electric (each less than 1%).
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Constructie van het product
The ETF uses an optimised sampling technique to try to capture the performance of its benchmark, owning a physical basket of securities designed to match the characteristics of the underlying index but not necessarily the exact stocks in the exact weights. Compared to the index’s approximately 1,600 constituents, the fund typically holds about 1,400-1,500 names. The fund uses futures for cash equitisation purposes, which helps to limit tracking error. iShares engages in securities lending and can lend up to 100% of the securities within this fund to improve its performance. The gross revenue generated from this activity are split 62.5/37.5 between the fund and the lending agent BlackRock, whereby BlackRock covers the costs involved. The fund lent out 0.88% on average over the past 12 months ending March 2015. To protect the fund from a borrower’s default, BlackRock takes collateral greater than the loan value. Collateral levels vary between 102.5% and 112% of the value of securities on loan, depending on the assets provided by the borrower as collateral. Additional counterparty risk mitigation measures include borrower default indemnification. Specifically, BlackRock commits to replace the securities that a borrower would fail to return. The indemnification agreement is subject to changes, and in some cases without notice.
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Kosten
The ETF has a total expense ratio (TER) of 0.20%, which is low compared to other funds offering similar exposure. The range for the tracking difference (-0.49 to -0.03) since 2011 suggests that annual holding costs may vary significantly from year to year. Additional costs to investors associated with trading the ETF include bid-ask spreads and brokerage fees.
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Alternatieven
There are a number of ETF choices that provide broad exposure to global equities. Providers offering ETFs that track the MSCI World Index include UBS, Source, Lyxor, db x-trackers, HSBC, ComStage and Amundi. This accumulating ETF charges the lowest fees, with a TER of 0.20%. IShares also offers a costlier non-Core distributing version of this fund, with a TER of 0.50%.
