The problem of choosing the best MSCI World ETF

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googel
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Joined: Tue May 09, 2017 2:02 pm

The problem of choosing the best MSCI World ETF

Post by googel » Tue May 09, 2017 3:45 pm

I'm a European investor wanting to invest in a physical accumulating ETF which tracks the MSCI World Index. As I'm an ETF noob, I'm having a hard time deciding which ETF to invest in. I have narrowed my choices to three candidates:

Amundi ETF MSCI World UCITS ETF DR (MWRD)
LU1437016972
TER 0.18%
Full replication

db x-trackers MSCI World Index UCITS ETF (DR) 1C (XDWD)
IE00BJ0KDQ92
TER 0.19%
Physical (Optimized sampling) replication

iShares Core MSCI World UCITS ETF (EUNL)
IE00B4L5Y983
TER 0.20%
Physical (Optimized sampling) replication

The fact that MWRD has the lowest expense ratio makes it very tempting. Another benefit for MWRD is the fact that it utilizes full replication which, in theory, should make it track the index better. Do you think I should go for MWRD or instead go for XDWD or EUNL for some reason other than TER? Obviously the other two have more assets under management which is an advantage.

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BeBH65
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Joined: Sat Jul 04, 2015 7:28 am

Re: The problem of choosing the best MSCI World ETF

Post by BeBH65 » Tue May 09, 2017 4:37 pm

Hi Googel,


The Amundi fund is a domiciled in Luxembourg, the others in Ireland.
Irish funds are more often discussed here, not sure if Luxembourg has the same advantageous tax treatment.

Have you checked if you can buy all of the funds; I.e. Does your broker offer cheap access to the relevant stock exchange? Please note that the ishares fund can be bought as IWDA or SWDA on other exchanges.

In what currency will you be buying, is the fund offered in that trading currency?


I had a look at the KIID on justetf, and the factsheets on Morningstar:
- The two first funds seem fairly new; Morningstar comments on it.
- On Justetf i reed that there are entry and exit charges for parties that want to create or redeem units. this is something new to me - anyone have any info on this? Could this result in a less liquid trading for theses ETFs?


Is there a difference in the spreads in the price of the funds?

In the end the differences between the ER does not seem big enough for me to personally switch away form IWDA now. I will be waiting to see how the funds perform.

Regards,
Last edited by BeBH65 on Tue May 09, 2017 10:33 pm, edited 3 times in total.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

minimalistmarc
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Re: The problem of choosing the best MSCI World ETF

Post by minimalistmarc » Tue May 09, 2017 5:22 pm

The MSCI world is developed world only.

If you want all world including emerging markets you need something that tracks the FTSE all world index, like Vanguard VWRL.

Or you just buy an emerging market tracker at market weighting

googel
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Joined: Tue May 09, 2017 2:02 pm

Re: The problem of choosing the best MSCI World ETF

Post by googel » Tue May 09, 2017 7:52 pm

I'm aware of the fact that MSCI World only represents developed countries. My plan is to invest in large, mid and small cap stocks in both developed and emerging markets at the lowest possible cost. I intend to mimic MSCI ACWI IMI by combining MSCI World, MSCI Emerging Markets IMI and MSCI World Small Cap indices at market weights. With this arrangement my goal is to get the cost down while maintaining a large portfolio. The only hurdle at the moment is choosing the right MSCI World ETF.

Vanguard ETFs are not an option for me as they are distributing.

I'm able to buy all of the three funds so that's not a problem. My currency is EUR.

The ultimate reason why I posted was because there hadn't been any discussion about the Amundi's new ETF in here or anywhere else in the internet. At least I wasn't able to find any. It's not a surprise as the fund was established just last year.

imperia
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Joined: Tue Feb 21, 2017 6:31 am

Re: The problem of choosing the best MSCI World ETF

Post by imperia » Wed May 10, 2017 12:00 am

Amundi ETF is new, too small and TER 0.18% is not big advantage.

Choose IWDA or XDWD.

googel
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Joined: Tue May 09, 2017 2:02 pm

Re: The problem of choosing the best MSCI World ETF

Post by googel » Fri May 12, 2017 10:28 am

Thank you for your answers.

I ended up going for a simple iShares Core MSCI World + iShares Core MSCI EM IMI combination as they are highly liquid and cost effective assets. I do hope that in the future there will be a possibility to invest in both developed and emerging markets with a single low cost accumulating fund. :happy

sik
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Joined: Wed Aug 15, 2018 4:06 am

Re: The problem of choosing the best MSCI World ETF

Post by sik » Wed Aug 15, 2018 4:11 am

Hi! Just stumbled upon this post while looking for info on XDWD which I recently purchased.
I intend to mimic MSCI ACWI IMI by combining MSCI World, MSCI Emerging Markets IMI and MSCI World Small Cap indices at market weights. With this arrangement my goal is to get the cost down while maintaining a large portfolio.
@googel
I have the same plan in my mind, would be great if you could share your experience so far. Are you still happy with the 2 ETFs you eventually selected? Which allocation did you choose in % for iShares Core MSCI World + iShares Core MSCI EM IMI?
Thanks a lot!

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BeBH65
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Re: The problem of choosing the best MSCI World ETF

Post by BeBH65 » Tue Aug 21, 2018 10:26 am

According to MSCI, Emerging Markets should be about 10% of the world markets.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

international001
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Re: The problem of choosing the best MSCI World ETF

Post by international001 » Tue Sep 11, 2018 5:23 am

ishares etfs is bigger (16B), so that's a plus

Out of ignorance, I have some questions:

How can you tell if those funds are distribution or accumulation. IWDA has the 'Acc' word in its name. But other than this? Morningstar doesn't say
Why does IWDA also have the same ticker than SWDA?
Which exchange do you recommend to buy them? All of them are in USD, so I guess if you are investing with EUR, better into an exchange using USD or EUR, so you don't have to use an intermediate currency like GBP (that would increase transaction costs)

imperia
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Re: The problem of choosing the best MSCI World ETF

Post by imperia » Tue Sep 11, 2018 6:57 am

Just go on ETFs provider official site and check Distribution policy :D
or you can use justetf.com for all ucits etfs

IWDA, SWDA, EUNL are the same ETFs listed on different Stock Exchange.

If you have euros, than buy in euros, if you have dollar, buy in dollar,....

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BeBH65
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Re: The problem of choosing the best MSCI World ETF

Post by BeBH65 » Tue Sep 11, 2018 1:34 pm

Many times tickers are reused for different exchanges with sometimes same and sometimes different trading currency.

IWDA on the Amsterdam exchange is traded in Euro.

Choose the exchange that is easiest and cheapest for you, while ensuring there is enough volume.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

international001
Posts: 402
Joined: Thu Feb 15, 2018 7:31 pm

Re: The problem of choosing the best MSCI World ETF

Post by international001 » Wed Sep 12, 2018 6:42 am

Thanks, I didn't know about justetf. Great site. Info it's there on the overview

I guess I like the ishares best, even if it's a bit more expensive

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