Inexpensive MSCI World ETF Options for Accumulating Wealth and Saving Money
In the world of investing, every penny counts, and this is particularly true when it comes to the Total Expense Ratios (TERs) of Exchange-Traded Funds (ETFs). A recent analysis has revealed that choosing the right ETF can make a substantial difference in returns, especially over long investment periods.
For those looking to build globally diversified wealth, MSCI World is a popular choice among Germans. However, not all MSCI World products have equal costs; some are expensive while others are cheap. This article will focus on the cheaper MSCI World ETFs, which are available at incredibly low TERs.
The Amundi MSCI World UCITS ETF, with a TER of around 0.07%, is among the cheapest and most popular global equity ETFs in Europe for broad market exposure. Another interesting alternative is the Scalable MSCI AC World Xtrackers UCITS ETF (ticker: SCWX), which carries a TER of 0.17%. Although it has a slightly higher TER, it employs synthetic replication for US equities to avoid dividend withholding tax, offering potential longer-term after-tax advantages for European investors sensitive to dividend tax drag.
In addition to these, the Xtrackers MSCI World UCITS ETF, Amundi MSCI World UCITS ETF, and SPDR MSCI World UCITS ETF all have a TER of 0.12%. Other competitors like Invesco FTSE All-World ETFs have slightly higher TERs (~0.15%) or lower assets under management, making them less established choices currently.
For pure cost-focused investors, the Amundi MSCI World ETF (~0.07% TER) is one of the cheapest and easiest to understand. For those seeking potential longer-term after-tax advantages despite slightly higher TER, the Scalable Xtrackers option deserves consideration but with awareness of commercial and structural risks.
In summary, for cheap MSCI World exposure:
- **Cheapest mainstream (physical) ETF:** Amundi MSCI World UCITS (~0.07%) - **Alternative with tax efficiency but higher TER:** Scalable MSCI AC World Xtrackers UCITS (0.17%)
These ETFs are suitable for saving and wealth accumulation, balancing low cost and practical investment considerations. It's essential to remember that high annual fees on MSCI World products can significantly impact returns, making the choice of a low-cost ETF crucial for investors.
[References] [1] Investopedia. (2021). Total Expense Ratio (TER). https://www.investopedia.com/terms/t/total_expense_ratio.asp [2] ETF Stream. (2021). Cheapest MSCI World ETFs: How to find the best cheap MSCI World ETFs. https://www.etfstream.com/articles/cheapest-msci-world-etfs-how-to-find-the-best-cheap-msci-world-etfs/ [3] ETF Strategy. (2021). The cheapest MSCI World ETFs for savings and wealth accumulation. https://www.etfstrategy.com/etfs/the-cheapest-msci-world-etfs-for-savings-and-wealth-accumulation/
- When aiming to save and accumulate wealth through personal-finance, it is recommended to consider the Amundi MSCI World UCITS ETF as one of the cheapest and easiest to understand options due to its low Total Expense Ratio (TER) of around 0.07%.
- For those who prioritize potential longer-term after-tax advantages, despite a slightly higher TER, the Scalable MSCI AC World Xtrackers UCITS ETF (ticker: SCWX) should be considered as it employs synthetic replication for US equities to avoid dividend withholding tax.
