Vanguard's popular VWRL ETF is often shared online. It's popular amongst investors that seek simplicity because it offers great diversification in a single fund. But VWRL isn't actually suited for Belgian investors. We explain why, and show you two better ways of investing in ETFs.

What is VWRL

VWRL, or by its full name "Vanguard FTSE All-World UCITS ETF Distributing" (ISIN: IE00B3RBWM25), is an ETF (or "exchange-traded fund") that you can buy through the majority of brokers in Belgium. It tracks the FTSE All-World index, which is composed of over 4,000 stocks from 40 countries, both from developed and emerging countries. This makes VWRL of the most diversified funds available on the market.

The fund is popular among European investors for a few reasons:

  • Great diversification in a single fund. There aren't many ETFs that are more diversified than VWRL. By investing in this ETF, you’re essentially owning a piece of all the 4,000 companies that are in the FTSE All-World index.
  • Price. ETFs are priced using their ongoing charges, also called "total expense ratio" or TER. This is a yearly percentage of your investment that Vanguard, the fund provider, charges for managing the fund. VWRL’s total expense ratio is 0.22%, making it one of the cheapest equity funds on the European market.
  • Significant returns. The returns of the fund have been very good throughout recent years. If you had invested €5,000 in VWRL in 2005, you would have had close to €21,800 today. This equals to an average annual return of 8.9%!

Why shouldn't Belgians invest in VWRL then?

It's because VWRL is costly from a tax perspective. VWRL is a distributive fund, meaning that the fund distributes the dividends to its investors on a quarterly basis. At the time of writing, the dividend yield of the fund is 1.99%. This means that at the current share price of €100, every quarter you receive €1.99 in dividends for each share of VWRL that you own.

The issue is that dividends are taxed at 30% in Belgium. So for each €1.99 in dividend, you need to pay the taxman €0.60 and get to keep only €1.40. This is hardly efficient for Belgian investors.

The solution to the tax on dividends is an accumulative fund. Whereas distributive funds like VWRL distribute dividends to their investors, accumulating funds directly reinvest the dividends. So instead of giving out the €1.99 out to you, Vanguard invests it into the companies in the fund. This way, you still get the benefit of the dividend: the share price of accumulating funds increases faster than distributing funds (because of the reinvested dividends). But you don't have to pay the tax on the dividend. To learn more about the taxes on your investments, we suggest you explore our piece on Belgian taxes.

So unless you have a good reason not to, it’s more interesting for Belgians to invest in accumulating funds when investing in stock ETFs because you won't be taxed on the dividend. And because capital gains on stocks are not taxed in Belgium, you won't be taxed either when selling an accumulating ETF.

Finally, accumulating funds are more in line with a passive approach to investing. Distributing funds require you to spend time on deciding how to reinvest the dividends. But if you are a passive investor, you want to spend the least amount of time possible managing your investments!

How to decide which accumulating ETF to choose?

VWCE as an alternative to VWRL

In another article, we highlighted considerations for Belgians to keep in mind when investing in ETFs:

  • Prefer accumulating funds: as explained above, accumulating funds avoid the 30% tax on dividends.
  • Domiciled in Ireland or Luxembourg: both Ireland and Luxembourg have special tax treaties with other countries. So it’s advantageous to invest in funds that are domiciled there.
  • Currency: if you buy a fund that is not traded in €, the broker converts it for you. But this comes at an additional cost.

One ETF in particular fits the bill: VWCE (ISIN: IE00BK5BQT80). It’s the accumulative version of VWRL, meaning that it follows the same FTSE All-World index. Because it's accumulating, many brokers charge a transaction tax of 1.32% for VWCE instead of 0.12% for VWRL (read more about the Belgian transaction tax). But the main advantage of VWCE over VWRL is that dividends are reinvested instead of distributed to you, meaning that you avoid the 30% tax on dividends. For this reason, it's one of the most popular ETFs among Belgians passive investors.

We also looked at the best Vanguard ETFs to buy if you wish to check other alternatives to VWCE and VWRL.

Investing the right way through Curvo

VWCE is one of the most broadly diversified index funds available. It seems that choosing VWCE as the only ETF in your portfolio is a great strategy for the long run. But there are downsides too:

  • Its ups and downs can prevent you from sleeping at night. Your risk tolerance determines how you deal emotionally with investment risks. Stocks are a risky asset, meaning that they fluctuate a lot. So sharp downturns happen more frequently for funds that only contain stocks, like VWCE. These wild fluctuations may not be in line with what you can emotionally stomach as an investor. A more balanced portfolio that also includes bonds can be a better match for your investor psychology and help you sleep at night.
  • It's just stocks. Bonds contribute to the diversification of a portfolio because often when stocks are dropping, bonds are rising (and vice versa). So allocating a part of your investments to bonds can reduce the impact of severe downturns.
  • It can be against your ethical values. Unfortunately, VWCE does not apply sustainability and ethical criteria when selecting the companies that it invests in. For instance, an investment in VWCE means an investment in companies that manufacture and sell controversial weapons, or enforce poor labour conditions. This isn’t aligned with many investors’ ethical values.

To learn more on the downsides of a "VWCE and chill" strategy, we recommend you read why investing only in VWCE isn’t suited to all.

We built Curvo to remove all the complexities of investing in ETFs. And it also solves the problems of investing just in VWCE:

  • Diversified portfolio built for you: When you download the Curvo app, you're asked questions through which your risk profile and capacity for taking that risk are determined. You’re then assigned a balanced portfolio that's suited to you and your goals. All portfolios are managed by NNEK, a Dutch investment firm licensed by the Dutch regulator (AFM).
  • Fractional shares: When you’re buying an ETF like VWRL or VWCE through a broker, you have to buy whole units. Thich means you'll always have some cash left on the side that's not working for you. Through the Curvo app, your investments with NNEK support fractional shares and all your money is invested, down to the latest cent.
  • Investments on autopilot: Set up a monthly savings plan and money is debited from your bank account every month to be invested for you in your portfolio. This is also known as "dollar-cost averaging" in finance jargon. It's the best saving habit and it makes sure you’re set up for success!
  • Sustainable investments: The portfolios exclude the most destructive companies to the planet. This means that non-renewable energy (nuclear power, fossil fuels), vice products (adult entertainment, alcohol, gambling, tobacco), weapons (civilian firearms, military weapons) and controversial companies are all excluded.

The past performance of the Growth portfolio has been very similar to VWRL and VWCE, as you can see in the chart below:

Historical performance comparison between Curvo Growth and VWRL
Historical performance comparison between the Growth portfolio and VWRL/VWCE (source: Backtest)
Screenshot of dashboard on the Curvo mobile app
Curvo solves the complexities of good investing


Due to the 30% tax on dividends, it’s quite obvious that you shouldn't buy the VWRL ETF if you reside in Belgium. If you have a long-term horizon in mind and want to go "all in" in a 100% stocks portfolio, it’s better to go for Vanguard’s VWCE ETF.

But if you want a more balanced portfolio, or your ethical values are important to you when investing, or if you simply don't want to manage your own investments through a broker, then invest with NNEK through Curvo is a good option. We built Curvo to take away all the complexities of good investing and we make sure you're set up for success over the long run.