After spending countless hours comparing different indexes and ETFs, here are the best ETFs in 2022 that I’ve found for investors based in Europe like myself.
I tried to cover the most relevant investment strategies – global, developed, emerging markets, US stocks, small cap as well as high dividend yield investing.
Please don’t forget that none of this is investment advice, just my personal opinion based on my own experience as an investor.
My ETF Investing Journey So Far
My wife and I have been investing into stocks in the form of low-cost ETFs since the beginning of 2017, so for 5 and a half years now.
They are the main pillar of our long-term investment strategy, making up about 60% of our investment portfolio.
As for the rest, 15% is in P2P lending for extra cashflow and diversification, 10% is in speculative assets like crypto and the remaining 15% are in cash at the moment.
We’re awaiting our first child and we’re keeping our reserves a bit higher than usual as a result.
As of August 9th, 2022 (the day of my video recording) our ETF shares are worth 165.000€.
We’re currently up 24,8% or 33.761€ on our investments, including paid out dividends:
The Best ETFs 2022
Now that you have a bit of background information about me and my history as an investor, let’s get to the best ETFs 2022 that I’ve found, which are actually available for European investors to invest in.
I also included each ETF’s ISIN number and ticker symbol. The ticker symbol can differ depending on the exchange you use to buy an ETF, so make sure to double-check on justetf if you can’t find it right away on Interactive Brokers for example.
Global ETFs (FTSE All-World, MSCI ACWI)
Let’s begin with what I believe to be the best ETFs covering the entire world, so not only developed markets, but also emerging markets like India or China. Since these are market cap weighted, stocks from Emerging Markets currently make up about 10% of each index, just to give you an idea.
There are two indexes that accomplish this goal very well, all within a single index: The FTSE All-World and the MSCI All Country World (ACWI).
Both of these are extremely close to each other in their performance, but the FTSE All-World index contains about 40% more stocks at 4.129 companies vs. 2.897 companies in the MSCI ACWI.
If you like to have dividends paid out to you instead of having them reinvested within the ETF, the Vanguard FTSE All-World is your only option here – there is no distributing ETF covering the MSCI All Country World Index.
The Vanguard FTSE All-World is also my personal favorite, it’s the only one we’re buying on a regular basis. It enables us to invest into the 3.700 most successful publicly listed companies from all over the world, all within a single, low-cost ETF.
We started with the distributing version in April 2018 and switched to the accumulating version at the start of 2021, to simplify our investment strategy even more and optimize our taxes a bit. This way, dividends are automatically reinvested into more shares of the stocks within the index by the ETF itself.
Getting back to the topic, here are the best global ETFs in my opinion:
- Vanguard FTSE All-World Dis. (IE00B3RBWM25, VWRL)
- Vanguard FTSE All-World Acc. (IE00BK5BQT80, VWCE)
- iShares MSCI ACWI Acc. (IE00B6R52259, IUSQ)
- SPDR MSCI ACWI Acc. (IE00B44Z5B48, SPYY)
Developed Markets (MSCI World, FTSE Developed)
Alright, let’s move on to Developed Markets.
Here in my view, we have two relevant indexes, the FTSE Developed World and the very popular MSCI World index, which even though it’s called world, only covers developed markets as well.
Still, I think both of these can also be good, viable options for a 1-ETF investment strategy, as long as you’re aware that you’re excluding stocks from emerging markets from your portfolio by choosing this route.
Both of these are very similar in their performance, since most of the markets and stocks they cover are the same.
There are just a few differences, like FTSE categorizing South Korea and Poland as developed markets, while MSCI still counts these as emerging markets and thus excludes them from the MSCI World.
Best Developed Markets ETFs:
- HSBC MSCI World Dis.(IE00B4X9L533, H4ZJ)
- Xtrackers MSCI World Dis. (IE00BK1PV551, XDWL)
- Vanguard FTSE Developed World Dis. (IE00BKX55T58, VGVE)
- SPDR MSCI World Acc. (IE00BFY0GT14, SPPW)
- iShares Core MSCI World Acc. (IE00B4L5Y983, EUNL)
- Vanguard FTSE Developed World Acc. (IE00BK5BQV03, VGVF)
Emerging Markets (MSCI EM, FTSE EM)
Now, if you want to add some exposure to Emerging Markets or increase their percentage in your portfolio, once again there are two relevant indexes in my opinion: The MSCI Emerging Markets (IMI) and the FTSE Emerging Markets.
Just make sure you keep in mind the differences I mentioned in the Developed Markets section, so it’s probably better not to mix a FTSE Developed ETF with an MSCI Emerging Markets ETF and vice versa, otherwise you might have some overlap.
For the MSCI Emerging Markets, in my opinion there are two ETFs that stand above the rest:
- iShares Core MSCI Emerging Markets IMI Dis. (IE00BD45KH83, IBC3)
- iShares Core MSCI Emerging Markets IMI Acc. (IE00BKM4GZ66, IS3N)
What sets these ETFs apart is that they actually cover the larger MSCI Emerging Markets Investable Market Index (IMI), which not only includes large and mid cap like the normal MSCI Emerging Markets, but also small cap stocks.
And since the IMI version outperformed its counterpart historically, this one would be my preferred choice.
Meanwhile, I think the FTSE Emerging Markets is a great alternative:
- Vanguard FTSE Emerging Markets Dis. (IE00B3VVMM84, VFEM)
- Vanguard FTSE Emerging Markets Acc. (IE00BK5BR733, VFEA)
US Stock Market (S&P 500)
Ok, what if you’re really bullish about the stock market in the US specifically and you think stocks from the United States will keep outperforming?
First of all, you should know that US stocks already make up about 58-60% of the FTSE All-World or All Country World Index and about 66-70% currently of the MSCI World or FTSE Developed World index:
So you already have a good exposure to the US market if you’re investing globally.
That being said, here is the index I would pick if you only want to invest in the US or if you want to increase the share of US companies in your portfolio.
I’m of course talking about the S&P 500 index, which is made up of the 500 largest publicly traded stocks in the United States.
Best S&P 500 ETFs:
- Vanguard S&P 500 Dis. (IE00B3XXRP09, VUSA)
- HSBC S&P 500 Dis. (IE00B5KQNG97, H4ZF)
- Vanguard S&P 500 Acc. (IE00BFMXXD54, VUAA)
Europe ETFs (Stoxx Europe 600)
Moving on, let’s say you want to have more European companies in your portfolio, as its share by market cap has shrunk a lot over the past decade in global indexes and you think Europe is ripe for a comeback.
To achieve this goal, I would pick the Stoxx Europe 600 index.
Best Europe ETFs:
- iShares STOXX Europe 600 Dis. (DE0002635307, EXSA)
- Lyxor Core STOXX Europe 600 Acc. (LU0908500753, LYP6)
- Xtrackers STOXX Europe 600 Acc. (LU0328475792, DX2X)
Small Cap ETFs (MSCI Europe SC, MSCI World SC)
A great alternative option to increase diversification in your portfolio, while still increasing your percentage of European companies could be to add the MSCI Europe Small Cap to your portfolio:
Best MSCI Europe Small Cap ETF:
- Xtrackers MSCI Europe Small Cap Acc. (LU0322253906, DX2J)
This ETF exclusively covers Small Cap stocks in Europe, which you have no exposure to if you’re investing via a simple, global ETF.
Not only that, this ETF outperformed European indexes tracking large and mid cap companies historically:
Now, if you want to invest into Small Cap stocks from all developed markets, not just Europe, then I would look at the MSCI World Small Cap Index.
Best MSCI World Small Cap ETF:
- iShares MSCI World Small Cap Acc. (IE00BF4RFH31, IUSN)
High Dividend ETFs (Global Quality Income)
Last but not least, if you only want to invest into stocks that pay out dividends to their shareholders and you want a higher dividend yield than what the usual developed world ETFs pay, in my opinion there is one choice that stands above the rest. The Fidelity Global Quality Income index.
Best High Dividend ETF:
- Fidelity Global Quality Income Dis. (IE00BYXVGZ48, FGEQ)
As you can see above, it far outperformed other popular, global high dividend yield options like the FTSE All-World High Dividend Yield ETF (not to be confused with the excellent, “normal” FTSE All-World ETFs).
At the end of the day, you need to keep in mind that the total performance of your investments is what matters the most. Don’t get blinded by a high dividend yield alone.
And there you have it, those are what I believe to be the best ETFs that are currently available to us European investors!
What is your favorite ETF?
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- P2P Bonus Offers
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Disclaimer: Investing involves risks of losses. You should always do your own research before investing into anything. Also, some of the links are affiliate links, which help support me, the website & YouTube channel. I only link to services I use myself, none of them are sponsored.
Just wondering, the High Dividend ETFs you mention, the yield is somewhere between 2% and 3%. What would be the reason to invest in this instead of a savings account, specially if you leave it for a year, you can also get 3% without the risk.
Great read btw, nice to read about your experiences.
The primary reason is that you’re expecting capital gains as well in addition to the dividend yield long-term, which historically should lead to significantly higher returns than 2-3% p.a.
But if you need to access your money in a year then I would definitely go with a savings account with a deposit guarantee instead (eg. Trade Republic – details here), where you can withdraw your money any time without taking on market risks.