The Definitive Guide To Equity Index Investing
PART 1 - INTRODUCTION
This guide is Bankeronwheels.com’s deep dive into Equity Index Investing.
We approach Equity Index Investing by:
- Showing investors what matters when thinking about different asset classes
- Shortlisting the very best ETFs as a starting point for their analysis
Why Is Our Guide Different?
First, We design Our Own Frameworks
For each type of investment and geography, based on Academia and our Portfolio Management experience, we first design a dedicated framework for ETF selection. Our guides are:
- Simple when possible
- Tailored to your needs
- Tax-Efficient with respect to dividends
- Sustainable when desired and intellectually honest
Then, We Select The Best Equity ETFs
We then use these frameworks to select the very best UCITS and non-UCITS ETFs. We take a Long-Term Investor’s Perspective and select ETFs that satisfy our criteria:
- Reputable
- Large
- Established
- Cheap
- Available and Liquid
Click below to jump straight to the shortlist.
We Consider All Audiences
This guide can benefit Bankeronwheels.com’s three core audiences. We highlight what sections you may find particularly helpful, depending on your profile:
- The Golden Retriever, aka Wise Passive Investor – A hands-off Investor, typically using a Global ETF, may benefit from understanding why sticking with a simple, yet effective strategy is time and tax-efficient. We also cover the European and UK equivalents of popular US Vanguard Index Funds.
- The Cyclist, aka Semi-Passive DIY Investor – A DIY Investor willing to customise her portfolio can probably benefit the most from guides. Understanding how to control allocation to countries and company sizes, incorporate tax-efficient synthetic ETFs for certain markets like the U.S. or select ethical value screens can make your portfolio more efficient and personalised.
- The Banker, aka Evidence-Based Investor – For Advanced Investors, this guide offers an introduction into why it may not be fully effective to include all small caps Stocks, given the evidence of small cap value factor premium. An Equity Risk Factor investing guide, that we will create, will further expand on this guide.
The Golden Retriever, aka Wise Passive Investor – A hands-off Investor, typically using a Global ETF, may benefit from understanding why sticking with a simple, yet effective strategy is time and tax-efficient. We also cover the European and UK equivalents of popular US Vanguard Index Funds.
The Cyclist, aka Semi-Passive DIY Investor – A DIY Investor willing to customise her portfolio can probably benefit the most from guides. Understanding how to control allocation to countries and company sizes, incorporate tax-efficient synthetic ETFs for certain markets like the U.S. or select ethical value screens can make your portfolio more efficient and personalised.
The Banker, aka Evidence-Based Investor – For Advanced Investors, this guide offers an introduction into why it may not be fully effective to include all small caps Stocks, given the evidence of small cap value factor premium. An Equity Risk Factor investing guide, that we will create, will further expand on this guide.
What's in thIS Guide?
Table of Content (Click on the Title Below)
You are reading this introduction.
This article is golden-retriever (beginner) friendly.
What if you could only buy one single investment? When you speak to people that have been in the investment business for a long time and ask them the above question, the answer often is a Global Equity ETF.
This article is golden-retriever (beginner) friendly. It is one of the 3 highlights of the series.
Most investors starting out would be confused to learn that, for example, investing into a MSCI World ETF wouldn’t get them a Global exposure. International ETFs can be confusing due to different naming conventions. By understanding how markets are defined, you can control the allocation to them in your portfolio.
This article is one of the 3 highlights of the series.
Some of our readers like to implement tilts towards markets that are cheaper, for example in Europe or Asia. If implementing a tilt can make overall valuations more bearable for some investors so that they can stick to their strategy in the long run, it may be a sin worth pursuing.
What are risks and opportunity costs to consider by concentrating your investments? Even in the strongest country, like the U.S. Here are some thoughts on why you should start building your portfolio with a Global ETF, and not the S&P 500, and then, if needed, overweight some US Sectors, if you desire it.
This article is golden-retriever (beginner) friendly. It is one of the 3 highlights of the series.
Overweighting US Stocks through European ETFs may come with an additional cost – taxes on dividends. ETF providers tracking US Indices, have recently embraced synthetic replication, and incremental returns are one of the reasons why as a more hands-on Investor you may consider them in your portfolio.
7. Investing In Emerging Markets [Coming Soon]
Why should you consider including Emerging Markets. Should it be a separate allocation? We will cover select Emerging Markets, and how to invest efficiently.
Let’s face it, Sustainable Investing is full of traps. And hardly anyone really understands it. But investors have 3 potential strategies that they can implement. One of them is a passive strategy based on Socially Responsible Investing (SRI) Principles.
If you pursue Socially Responsible Investing, make sure to carefully select a pure SRI benchmark, that excludes any impact of ESG Ratings. ESG Ratings are the opposite of what you imagine.
If you read about passive investing from a US Source, you may have heard the Vanguard Fund tickers – VT, VTI or VXUS. What are their equivalents for European and UK Investors?
This article is golden-retriever (beginner) friendly.
FROM OUR TEAM
This website was created to provide you with all necessary resources to invest without incurring any additional costs.
Servers, data, and software are some of our costs, just to name a few. Most importantly, our time is the main resource to create great content. If you find that our guides helped you on the path to financial success, you may give us a hand by buying a coffee.
By buying us a coffee you support our website and our investment research. Here are other ways to help.
FROM OUR TEAM
This website was created to provide you with all necessary resources to invest without incurring any additional costs.
Servers, data, and software are some of our costs, just to name a few. Most importantly, our time is the main resource to create great content. If you find that our guides helped you on the path to financial success, you may give us a hand by buying a coffee.
By buying us a coffee you support our website and our investment research. Here are other ways to help.
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Book a coaching session with us
Beginners often ask us:
- How do I reach my goals – What investments do I need to take into consideration when e.g. Taking a Sabbatical, buying a House or saving for Early Retirement?
- When should I invest – I fear that investing a lump sum in this market may have a negative impact on my returns. How can timing of buying ETFs affect my performance?
Advanced investors may avoid costly mistakes:
- Challenge my Portfolio – Here is my portfolio – what am I missing? What could derail my strategy? What can I do to protect my portfolio from shocks?
- Help me quickly understand – What makes Inflation Linked Bonds outperform? Bond Ladder or Bond ETFs? Why do some investors add Small Cap Value stocks to their portfolios? How can I exclude Tobacco companies from my portfolio? Are the synthetic ETFs I screened safe? What is Factor Investing?
By signing up for a financial coaching session you support our website and our investment research. Here are other ways to help.
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Book a coaching session
Beginners often ask us:
- How do I reach my goals – What investments do I need to take into consideration when e.g. Taking a Sabbatical, buying a House or saving for Early Retirement?
- When should I invest – I fear that investing a lump sum in this market may have a negative impact on my returns. How can timing of buying ETFs affect my performance?
Advanced investors may avoid costly mistakes:
- Challenge my Portfolio – Here is my portfolio – what am I missing? What could derail my strategy? What can I do to protect my portfolio from shocks?
- Help me quickly understand – What makes Inflation Linked Bonds outperform? Bond Ladder or Bond ETFs? Why do some investors add Small Cap Value stocks to their portfolios? How can I exclude Tobacco companies from my portfolio? Are the synthetic ETFs I screened safe? What is Factor Investing?
By signing up for a financial coaching session you support our website and our investment research. Here are other ways to help.
ETF Selection
Methodology
Vanguard
- What is Vanguard ESG Global All Cap UCITS ETF?
- What is Vanguard ESG International Stock ETF? [Coming Shortly]
- What is Vanguard ESG US Stock ETF? [Coming Shortly]
iShares
- What is iShares MSCI World ESG Enhanced UCITS ETF?
- What is iShares MSCI USA SRI UCITS ETF?
- What is iShares MSCI USA ESG Enhanced UCITS ETF? [Coming Shortly]
- What is iShares MSCI Europe SRI UCITS ETF? [Coming Shortly]
- What is iShares MSCI USA ESG Screened UCITS ETF? [Coming Shortly]
- What is iShares MSCI EM SRI UCITS ETF? [Coming Shortly]
- What is iShares MSCI EM IMI ESG Screened UCITS ETF? [Coming Shortly]
- What is iShares ESG MSCI USA Leaders ETF? [Coming Shortly]
- iShares ESG Aware MSCI USA ETF [Coming Shortly]
- What is iShares Global Clean Energy ETF? [Coming Shortly]
- What is iShares ESG Advanced MSCI USA ETF? [Coming Shortly]
- What is iShares ESG Advanced MSCI EAFE ETF? [Coming Shortly]
- What is iShares ESG Advanced MSCI EM ETF? [Coming Shortly]
Other Providers
- What is Xtrackers MSCI USA ESG UCITS ETF? [Coming Shortly]
- What is AMUNDI S&P 500 ESG UCITS ETF? [Coming Shortly]
- What is Invesco Water Resources ETF? [Coming Shortly]
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All information found here, including any ideas, opinions, views, predictions expressed or implied herein, are for informational, entertainment or educational purposes only and do not constitute financial advice. Consider the appropriateness of the information having regard to your objectives, financial situation and needs, and seek professional advice where appropriate. Read our full terms and conditions.
