The Big Global ETF Comparison
"Global ETF" is not a homogeneous category: behind the label sit four indices with different market coverage — and dozens of products whose real costs diverge more than the TER suggests. This hub sorts both: first the index choice, then the product choice by the criteria that matter long term.
Step 1: The index sets the strategy
The four relevant global indices differ primarily along two dimensions: emerging markets yes/no and small caps yes/no. Everything else — a US share of roughly 65–70%, tech dominance, mega-cap concentration — they share.
The detailed head-to-heads: MSCI World vs. ACWI settles the EM question, MSCI World vs. FTSE All-World the provider comparison at index level.
| Index | Stocks | Emerging markets | Small caps | Market coverage |
|---|---|---|---|---|
| MSCI World | around 1,400 | no | no | around 85% of developed markets |
| MSCI ACWI | around 2,500 | yes (around 11–12%) | no | around 85% globally |
| FTSE All-World | around 4,300 | yes (around 10%) | partially | around 90–95% globally |
| MSCI ACWI IMI | around 8,000 | yes | yes | around 99% globally |
Concentration risks, ETF overlap and look-through analysis – free with MoneyPeak.
Step 2: Product choice — TER is not the price
At product level, four criteria count, in this order:
- Tracking difference (TD): the realised deviation from the index over several years. Good MSCI World ETFs beat their TER through securities lending and efficient sampling — the TD is the true price, not the TER.
- Fund size: from a few hundred million euros the closure risk is practically irrelevant; billion-euro funds like the iShares Core MSCI World or Vanguard FTSE All-World are worry-free here.
- Replication: mostly physical with sampling for global indices; the methodology question matters less for returns here than for pure US indices (physical vs. synthetic).
- Distribution policy: accumulating or distributing — a tax question, not a return question.
In concrete terms: between an ETF with a TD of −0.05% and one at +0.25%, a €100,000 portfolio loses around €300 per year — more than the TER gap between most products.
Tax-wise it is a draw — almost
All products compared here are equity ETFs under German rules: 30% partial exemption, 26.375% flat tax including solidarity surcharge on the rest, advance lump-sum tax for accumulating funds. The index choice has no tax dimension — with one exception: combining several ETFs (say World + EM) creates FIFO-taxable sales when rebalancing. The one-fund solution rebalances internally and tax-free. Over long holding periods and large portfolios, that is a real, often underrated advantage.
Frequently asked questions
Which global ETF is the best?
There is no universal best. Settle the index question first (EM and small caps yes/no), then pick the product with the best tracking difference and sufficient size — TER alone is a poor compass.
Does holding several global ETFs make sense?
Usually not: World, ACWI and FTSE All-World overlap heavily. Holding several barely diversifies but complicates rebalancing and tax tracking.
How important is fund size really?
From a few hundred million euros a fund closure is unlikely, and even then it causes a taxable forced sale, not a loss. Size is a comfort criterion, not a first-order risk.
Concentration risks, ETF overlap and look-through analysis – free with MoneyPeak.