The financial world, and investing in particular, can come across as overwhelming at first. What do I buy, which asset classes do I invest in, how long do I hold certain positions, and what about all the different technical specifications?

In the article below we want to inform you as good as we can about some of the different aspects and criteria of investing in ETFs, including some personal tips on how to become a solid investor.

What is ETF investing

An ETF, or Exchange-Traded Fund, is like a basket of different investments bundled together, such as stocks, bonds, or other assets. When you invest in an ETF, you're essentially buying a share of that basket. The basket can be focused on a very wide global diversification, but there are also baskets that focus on specific topics, like green energy, artificial intelligence or others.

ETF investing has gained popularity in recent years due to their favourable characteristics: diversification, low costs, transparency, liquidity and the passive investment character.

Due to their passive character, the potential to automatically reinvest dividends and the generally low management fees make ETFs a very valuable alternative for investing with financial institutions. Below is a comparison of a globally diversified stock ETF (IWDA) vs a globally diversified stock fund offered by Belgium's biggest bank KBC:

Discover the analysis on Backtest

Tips to successfully invest in ETFs

Our tips for a successful investment journey with ETFs are:

  1. Set up a personal investment plan
  2. Adopt a buy-and-hold strategy
  3. Stay the course
  4. Keep it simple
  5. Keep costs low
  6. Minimise taxes

Let's dig into each in more detail.

1) Set up a personal investment plan

Everyone's situation is different, and so should be your investment plan. The plan should align with your personal needs, so ask yourself the following questions:

  • Investment horizon: how long can I miss the funds that I am investing?
  • Risk profile: how much risk am I willing to take? Different personalities exist also in the investment world, which we can divide into a few categories with different allocations (see table below).
  • Asset allocation: which percentage of my funds I want to allocate to stock ETFs and bond ETFs? You can allocate assets in line with your risk profile (e.g. 70% stocks 30% bonds for an offensive investor).
  • Risk tolerance: how much annual deviation are you willing to tolerate for your portfolio? Are you looking for stable dividend income with little variation, or can you accept a potential decrease of 20% or more in a given year? And do I want to rebalance when certain assets have under- or over-performed?

Based on your personal answer on the above questions, you can develop your personal investment plan.

The longer your investment horizon, the safer stocks become (due to the growth of the economy and inflation) and the riskier bonds become (due to interest rate fluctuations, which significantly impact the value of bonds).

So if your investment horizon is short, you should consider allocating more funds to fixed income (bonds) and less in fluctuating assets (stocks). Conversely, If your "holding period" is more than 20 years, bonds might not be the best investment vehicle and you should consider stocks.

Risk profile Stock ETFs Bond ETFs Investment horizon
Very defensive 15% 85% Less than 5 years
Defensive 30% 70% 5 years
Neutral 50% 50% 7 years
Offensive 70% 30% 9 years
Dynamic 100% 0% 12+ years

2) Adopt a buy-and-hold strategy

In this strategy, you hold your investments, regardless of market fluctuations, until you reach your goal. For many, this would be at retirement.

The buy-and-hold strategy works because it gives the opportunity to compounding to work its magic. Exponential growth, which is how the stock market grows, becomes really visible in the long term. This means that the majority of your returns will be realized as you approach your investment horizon, due to the fact that your assets have compounded longer.

On top of that, the strategy is much better for your mental well-being. Active investors constantly need to monitor their investments and assess if they need to buy or sell a particular stock. This has the danger of bringing a whole range of negative emotions onto oneself: anxiety, stress, regret... In contrast, the ETF investor who has adopted a buy-and-hold strategy is not concerned with short-term fluctuations in prices and so remains undisturbed.

This control of emotions allows you to act more rational, which results in less impulsive decisions, less transactions, lower fees and in the end a higher return.

3) Stay the course

Financial markets fluctuate. Selling under panic during downturns or over-enthusiasm during bull markets, can harm long-term financial outcomes. When investing, gains are made over years rather than days.

Stay calm, buy and hold as much as you can without too much focus on selling. For example, many investors have sold their stocks in panic during the dot com bubble. This often meant a large loss, as many investors bought their investments expensive during the hype, and sold them cheap during the crash.

However, if these investors would have held on to their positions and bought more when they were more affordable, they would have had very strong returns in the years after.

4) Keep it simple

A simple investment portfolio is easier to understand, manage, and maintain. The more holdings your portfolio will have, the more follow-up and research will be required.

For example, if you would hold 20 different ETFs or individual stocks, you might feel the need to follow up on all of them, which can make passive investing feel like an administrative task.

That's why it's important to make a good choice on which indexes to follow, which ETFs to buy, and to stick to the investment plan that you have created for yourself.

5) Keep costs low

Investment costs, including fund expenses and taxes, can eat into your returns. By choosing low-cost investment options and employing tax-efficient strategies, you can enhance your net returns.

Here are some tips to keep your costs low:

  • Choose low-cost ETFs: seems obvious but it's important to keep in mind!
  • Avoid frequent trading: as all these transaction costs add up and significantly reduce your return. Remember, every euro spent on transaction costs in a euro that will not compound for you until you reach your investment horizon.
  • Use low commission brokers: broker fees can depend on the type of broker you choose, and the amount you invested. Brokers like DEGIRO or MEXEM have significantly lower costs than other brokers, which frees up space to let your investments compound.
  • Be tax efficient: an accumulating ETF automatically reinvests dividends without transaction fees. In Belgium for example, this will save you 30% if you would have those dividends paid out ("roerende voorheffing / précompte mobilier").
  • Diversify your portfolio: try to eliminate the high-cost ETFs, and replace them for low-cost alternatives without active management.
  • Automate your investments: setting up automatic investment plans (e.g. buy €500 in IWDA every 1st day of the month) allows you to not be affected by market fluctuations and wait for the optimal moment. It's better to have time in the market than timing the market.

6) Minimise taxes

Try to reduce the tax burden on your investment returns. Every euro paid in taxes is a euro less in returns.

As indicated above, try to go for accumulating ETFs. This way the dividends get reinvested automatically. In Belgium, this saves you on the 30% dividend tax. As there currently is no tax on capital gains for stocks, the ETF can later be sold tax-free which puts money in your pocket without paying taxes on it.

Tips for choosing the right ETF

We're convinced of ETFs but how do we know which ETF to choose and invest in? Let's explore some characteristics to keep in mind. We'll also show you with a concrete example on what to look out for and the criteria that stands out.


ISIN stands for International Securities Identification Number, which is a unique code to identify assets globally. This code allows you to find information easily, all of the criteria below can be found by searching for the ISIN number. This will most likely lead you to the page of the fund manager (for example iShares or Vanguard), and that page holds all the information you need.

The first two characters of an ISIN refers to the country where the fund is domiciled (e.g. IWDA (IE00B4L5Y983) is domiciled in Ireland for tax purposes)

Underlying index

The underlying index is a crucial element in the construction of an investment portfolio. The funds you will buy will match the performance of the index, so the index you choose to track has a strong impact on your performance. Examples of indexes are:

  • MSCI World index: similar index to the FTSE All-World, MSCI World focuses entirely on the developed countries (basically the world economy without the emerging markets). This index is one of the most popular due to its excellent diversification and performance.
  • MSCI Emerging Markets index: this index consists of the major emerging countries, like China, India, Taiwan or Brazil. It's a well-diversified stock index specifically targetting these growth economies. Investments in emerging markets tend to fluctuate more as they're generally more risky, but they have also generated higher returns in the past.
  • S&P 500 index: the major index of the USA, which is often used as a global benchmark to check the performance of other indexes and funds. This index is the backbone of the American economy, as it involves both the big technological companies, biggest banks and consumer companies we all know today (e.g. P&G, Coca Cola, Pepsico, Johnson & Johnson,...). Another example is the Nasdaq-100 which follows the top 100 US technological companies.
  • FTSE World Government Bond - Developed Markets (EUR Hedged) index: this index only holds government bonds from the developed markets, which hold a very high credit rating and as a result are very stable. This leads to less volatility, but as a result we can not expect high returns. An additional benefit of this index is that it is fully denoted in EUR, which protects it from currency risks and fluctuations. These type of bond ETFs are primarily used to make stock portfolios less volatile due to their stable income.
Instead of purchasing VWCE, you could purchase IWDA (MSCI World index) and EMIM (MSCI Emerging Markets IMI index).

Name of the ETF

The name (and ticker) of an ETF can display valuable information about a fund. Below you can find an example on IWDA:

On justETF, you can get all the information for ETFs directly.

Let's break down the name of the ETF:

IWDA Ticker
iShares Core MSCI World UCITS ETF USD Acc (EUR) Name
iShares Fund provider
Core MSCI World the fund invests in the stocks in the MSCI World index
MSCI World the underlying index which is being tracked by the ETF
UCITS a European guideline which indicates that the ETF is following very strict regulations for funds
USD the dividends are paid in USD
Acc the fund is accumulative so reinvests the dividends
EUR indicator that the fund can be bought on a local exchange in euro

Total Expense Ratio (TER)

The cost, mostly consisting of management fees, that you can expect to pay to the fund manager. The TER is best kept as low as possible, and is always included in the purchase price. The higher the TER, the lower your annual return for tracking the index.

A higher TER mostly means that the fund is actively managed, which it mainly does in an attempt to beat the market. As the fund uses more resources to beat the market, the fund requests a higher management fee from the investor.

In reality, this means that the fund will be more expensive for you to purchase, and as a result generate lower returns.

As an alternative for expensive actively managed ETFs, try to construct your portfolio around low-cost ETFs (a TER of 0.2% or lower is desirable). This will maximize your returns and outperform the other funds.

Assets Under Management (AUM)

The size of an ETF, which gives you an idea how trusted a certain ETF is by investors. A larger fund basically means a higher liquidity, as this fund will be traded more frequently due to its reputation.

ETFs with a low fund size might have difficulties to attract volume, which means you might not always be able to buy or sell the ETF at the price you would want.


The currency in which a fund is traded plays an important role, as it allows you to avoid foreign exchanges fees. European investors should always try to buy an ETF in EUR to minimize costs.

ETFs are usually denoted in EUR, USD or GBP. It's always better to construct a portfolio in your own currency, so you minimize the fluctuations in conversion rates.

Dividend & tax policy

The tax aspect means whether the fund holds a distributing (dividend paid out) or accumulating policy (dividends are reinvested).

As indicated previously, in Belgium dividends are taxed at 30%, while capital gains are free of tax on stocks. As a result, a Belgian investor should always try to buy accumulating ETFs for tax purposes.

Domicile & EER registration (TOB)

In Belgium, the country where a fund is registered determines the stock transaction tax (also known as the TOB) that an investor will pay when purchasing a certain fund.

For tax purposes, it's always good to own an ETF which is domiciled in Ireland for optimal tax efficiency. As long as the fund is not registered in Belgium, you can decrease your TOB to 0.12% for accumulating and distributing ETFs. We wrote a guide on the topic if you wish to learn more.


A physical ETF tracks the underlying index by buying all of the  stocks in the index, according to the weights dictated by the index. So a physical ETF tracking the S&P 500 literally buys each of the stocks in the S&P 500.

A synthetic ETF does not hold the underlying stocks that it is designed to track. Instead, it uses derivatives such as swaps, futures,  or options to replicate the performance of its underlying index. The ETF provider will enter into a contract with a counterparty, typically an  investment bank, to create a synthetic replica of the underlying index. The counterparty will then provide the ETF with a return based on the  performance of the index.

Considering the risk involved with our life savings, it's best to stick with physical ETFs. They are also easier to understand and more transparent.


A market weighted index weights the assets based on their market capitalization, resulting in a larger weight for big companies. An equal weighted index gives the same weight to all the underlying assets, which results in a fairer distribution.

Basically, the equal weighted index can give you a better understanding of how the index is really performing on an individual basis, as it eliminates the size aspect of the companies. Big companies normally get good returns (and take a big size in the index), and the result can sometimes be very dependent on what these big companies are doing.


Let's now take a look at our criteria and compare two popular ETFs for Belgian investors - IWDA vs VWCE:

Characteristic IWDA VWCE
Name iShares Core MSCI World UCITS ETF USD (Acc) (EUR) Vanguard FTSE All-World UCITS ETF USD Accumulation (EUR)
Index MSCI World FTSE All-World
Total expense ratio (TER) 0.20% 0.22%
Assets under management $60bn $20bn
Currency EUR EUR
Dividend Accumulating Accumulating
🇧🇪 TOB 0.12% 1.32%
Replication Physically Physically
Weighting Market weighted Market weighted

As you can see, funds which seem very similar at first can have different characteristics.

By checking the ETFs for their characteristics, we can quickly identify individual differences.

For example, the largest difference here would be the TOB. The TOB of VWCE is 11 times larger than IWDA, which can weigh significantly on your returns (remember that every euro spent on fees is a euro that can not compound for you for decades). On top of that, IWDA is around three times bigger than VWCE (meaning a better liquidity) at a lower expense ratio (0.20% vs 0.22%).

So even though the funds seemed quite similar, IWDA would be a better choice for Belgian investors.

Read more on comparing IWDA vs VWCE.

Curvo: the work is done for you

At Curvo, we can do the heavy lifting for you. Backtest was built to help individual investors simulate and analyse concrete portfolios and their performance for you.

Choosing an ETF and following the tips and criteria above is not the end of the story. It's a small part of building a portfolio that will give you success over the long term. Defining the right portfolio is probably the most important and most difficult task for every investor. The composition of your portfolio is dependent on goals, your appetite for risk, your age and your income. We understand this difficulty, along with the many other subtleties investors have to deal with in order to be successful over the long term. For instance, a good  understanding of the impact of taxes is important when managing your investments yourself. All this can be daunting, especially if you're just starting to invest.

Create an account in only a few minutes and put your money to work!

Curvo was built to take away all the complexities of investing in index funds. No need to search through thousands of ETFs or scour wikis in  order to understand how to select the right fund for you.

Learn more about Curvo's mission is to improve the financial well-being of Europeans through the power of passive investing. Find out more about our mission and how Curvo works.


Investing can seem daunting and quite complex to newcomers. There is a lot to be aware of, a lot of criteria available to screen ETFs and many different portfolios to construct.

We suggest you explore the tips that were given in the beginning of the article. Develop your personal investment plan and learn about the different criteria available to construct your portfolio.

In the end, the most important aspect which will decide your returns is YOU. You can analyse all the numbers you want, come up with complex criteria and structures, but if we can not control our own emotions then it will impact our returns if we're being impulsive.

Questions you may have

What are good ETFs to invest in?

Based on our criteria for selecting an ETF, there are some ETFs that we think are a good choice for most investors:

  • VWCE: tracks the FTSE All-World index
  • IWDA: tracks the MSCI World index
  • EMIM: tracks the MSCI Emerging Markets index
  • SXR8: tracks the S&P 500 index
  • NQSE: tracks the Nasdaq 100 index
  • DBZB: bond ETF that tracks the FTSE World Government Bond - Developed Markets (EUR Hedged) index

We suggest you check our list of best ETFs for Belgians for a more complete overview.

What is better, ETFs or stocks?

While owning shares of individual companies can certainly be profitable over the long term, ETFs can offer you a large bonus: the opportunity to track an entire diversified index, paired with low costs and high liquidity.

In the end it's better to own the entire haystack, rather than searching for a needle in that same haystack, as it allows you to greatly reduce your risk for a similar return.