Best ETFs on Bolero in 2024

How to select an ETF

There are a few criteria to consider when choosing an ETF. Here’s a recap of the most important ones:

• Tracks an index: Index investing, also known as passive investing, is a superior strategy for most people. Active funds, such as those offered by most banks, are much more expensive and offer lower returns than an ETF (or tracker) that simply tracks an index.
• Cheap: Most ETFs are already cheap compared to active funds. But if we have a choice between several ETFs that track the same index, we prefer the cheaper one with a lower total expense ratio (TER).
• Accumulating: Belgian investors should opt for accumulating ETFs to reduce taxes. As these funds reinvest their dividends directly, you don't have to pay the 30% dividend tax.
• Domiciled in Ireland or Luxembourg: Investing in ETFs domiciled in Ireland or Luxembourg is tax-efficient due to favourable treaties. These ETFs are identifiable by 'IE' or 'LU' in their ISIN codes.
• Diversified: Diversification minimises risk by spreading investments across different sectors and countries, reducing the impact of market downturns.

Best ETFs on Bolero

Based on these criteria, we selected five of the best ETFs available on Bolero:

iShares Core MSCI World (IE00B4L5Y983)

iShares Core MSCI World ETF is offered by iShares and is known by its ticker IWDA. It tracks the MSCI World index, an index that consists of about 1,500 stocks from 23 countries that economists qualify as "developed": United States, Germany, Japan, United Kingdom, Australia… Investing in IWDA means investing in a wide segment of the global economy. Many investors choose to simply invest in this one ETF as their entire portfolio. To purchase €500 of IWDA through Bolero, it would cost you €5 as it's part of the Bolero ETF playlist.

Based on the historical data of the MSCI World index, the ETF has delivered an average annual return of 10.1% since 1979.

SPDR MSCI ACWI IMI (IE00B3YLTY66)

The SPDR MSCI ACWI IMI ETF is one of the most diversified ETFs on the market. This fund, launched by SPDR in 2011, tracks the performance of the MSCI All-Country World IMI index, abbreviated as MSCI ACWI IMI. The index is composed of more than 3,000 companies from 23 developed and 24 emerging markets countries worldwide. Because it's so diversified, this ETF is a great way to invest in the global stock market. Do note that it does not exclude companies based on sustainability criteria. Unfortunately it isn't part of the ETF playlist yet so to purchase €500 of MSCI ACWI IMI, it would cost you €7.50.

Based on the historical data of the MSCI ACWI IMI index, it has delivered an average annual return of 7.9% between 1994 and 2024.

iShares Core MSCI Emerging Markets IMI (IE00BKM4GZ66)

EMIM is offered by iShares and tracks the MSCI Emerging Markets IMI index. The index consists of roughly 3,000 companies from 23 countries that economists qualify as "emerging": China, Taiwan, India, South Korea, Brazil… What’s also interesting is that you get significant diversification as you get small to large companies in one single ETF. It's one of the better ETFs to invest in emerging markets. To purchase €500 of EMIM through Bolero, it would cost you €5 as it's part of the Bolero ETF playlist.

Based on historical data of the underlying index, a €10,000 investment in EMIM in 1994 would have resulted in almost €40,000 in early 2024. That's a 4.8% average annual return:

iShares Core S&P 500 (IE00B5BMR087)

A popular ETF amongst investors is the iShares Core S&P 500 ETF. It's one of the better S&P 500 ETFs, and is offered by iShares, one of the largest fund providers in the world. S&P 500 stands for the Standard & Poor’s 500 index and as the name suggests, it seeks to track the performance of an index composed of the 500 largest American companies (even though it holds 503 companies at the moment). Through the S&P 500, you get exposure to a large section of the US economy as it covers 80% of the total American market capitalisation. To purchase €500 of this ETF through Bolero, it would cost you €5 as it's part of the Bolero ETF playlist.

Based on the historical data of the S&P 500 index, the ETF has delivered an average return of 10.4% per year since 1992. That’s quite a significant return on your investment if you began your investment journey in the early 90's:

SPDR Bloomberg Euro Corporate Bond (IE00B3T9LM79)

This ETF by SPDR invests in corporate bonds denominated in euro by tracking the Bloomberg Euro Corporate Bond index. But it's more diversified in two ways. First, it invests in bonds of all maturities, the average maturity being 5 years. Interest rates have risen sharply recently and even slightly longer corporate bonds now give an acceptable return to park your money. Secondly, it does not exclude bonds based on sustainability practices of the issuing company. As a result, this bond ETF invests in over 3,200 high-quality euro bonds. With such a wide spread, the damage from an individual underperforming bond is barely noticeable.

This ETF pays out its interest and the cost is 0.12% per year. Purchasing bonds on Bolero isn't cheap given that it isn't part of their ETF playlist. It will cost you €7.50 to purchase €500 of the ETF.

Based on historical data of the index and assuming interests are reinvested, it has returned an average 3.4% per year since 2009:

Bolero's ETF playlist

The Bolero ETF playlist reduces the transaction fee for a specific list of ETFs. They inspired themselves from DEGIRO's core selection in order to be competitive for more Belgian investors.

The transaction fees for ETFs in the playlist are as follows:

You can find all ETFs in the playlist on Bolero's website.

The playlist lacks bond ETFs

One downside of the playlist is that it doesn't have any bond ETF. Yet we think that bonds should be part of a balanced portfolio of ETFs for most people. That's why we picked a bond ETF in our selection that's not in the playlist.

Fee for other ETFs

If you want to choose an ETF that isn't on the playlist, it will cost you a little more. Bolero charges higher transaction fees for larger transaction amounts and different fees per exchange. This fee structure is fairly standard for a broker, but can make the whole process a little confusing. For example, buying anything on the other European exchanges costs at least €7.50. This makes Bolero unattractive for smaller investments.

Tips for investing in ETFs on Bolero

Here are some tips for investing in ETFs on Bolero:

1. Select ETFs that are part of the ETF playlist to reduce transaction fees.
2. If you're investing monthly, bundle several months' investments into a single transaction. The relative cost of the brokerage fee goes down as the transaction amount goes up. Unfortunately, Bolero does not allow you to automate your investments.

Read our review of Bolero if you want to learn more about the pros and cons of investing through them. We also compared Bolero to the other brokers in Belgium.

The challenges of investing in ETFs through Bolero

When you manage your own investments through a broker, you have to work out what to buy, when to buy it, understand the tax implications of your decisions, rebalance your investments and make sure they stay in line with your goals and risk tolerance. There are a number of challenges:

• The allocation of your portfolio is in your hands: figure out how to build the right allocation that meets your long-term goals.
• You need to do your homework: figuring out how to start and understanding the intricacies of investing in ETFs takes an effort. Yet it's important, because in investing the details matter.
• It takes time: send money to your broker monthly and then make the purchases.
• Costly for monthly contributions: if you want to invest on a monthly basis, you'll have to pay a lot in brokerage fees. Also, because you buy units and can't buy fractions, you'll always be left with cash in your account.
• Learn how to rebalance your portfolio: if you have several funds in your portfolio, how do you rebalance? Quarterly or annually? How do you decide?
• Keep track of your portfolio: you may have to set up a spreadsheet to stay on top of things!
• Understand taxes: they can be complicated and change frequently.
• Discipline: it requires confidence and discipline to stay the course.
• Brokers want you to trade: the majority of brokers make money on you trading so a “passive” approach isn’t in their best interest.

Curvo: an easier alternative to Bolero

We realised the difficulties of investing through brokers like Bolero. So our approach is different: the right investment decisions are made for you so you don't have to worry.

A portfolio tailored to you

Instead of having to pick and choose the right ETFs from the thousands available through a broker like Bolero, through Curvo you invest in a portfolio that is tailored to you and your goals. Each portfolio is managed by NNEK, a Dutch investment company licensed by the Dutch regulator (AFM). They're made up of globally diversified index funds, which means you get a piece of the growth in the global economy, and they're the best way to make the most of your savings in the long term.

Automate your investments

Set up a direct debit, and your money is automatically invested every month. Put your investments on autopilot and get back to the important things in your life rather than worry about your investments!

Be in control of your financial future

We believe that investing is an important tool for our generation to improve our financial well-being and to prepare for our future. We are building Curvo to fulfil that vision and make good investing easy and accessible to all. Find out more about Curvo.

Summary

Bolero stands out as a leading broker in Belgium and offers a wide range of ETFs. By prioritising index-based, low-cost, accumulating ETFs domiciled in Ireland or Luxembourg and diversified across multiple sectors and countries, you can make a solid choice. While their ETF playlist offers reduced fees on a curated selection of ETFs, you should also consider the broader range, including bond ETFs that are not on the playlist but are still available on Bolero. Although Bolero's fee structure may be less favourable for monthly investments, you can reduce costs by consolidating transactions. Or you can consider an app like Curvo that allows you to automate your investments in ETFs.