Table des matières
Introduction
I’m introducing you to a financial product that simplifies access to global markets, whether you’re a beginner or a seasoned investor.
Investing in the stock market can seem complex, but ETFs (Exchange Traded Funds), or trackers, greatly simplify access to global markets. Among them, the MSCI World ETF is one of the most popular, as it allows you to invest in a single transaction in more than 1,500 companies across 23 developed countries. This index, created in 1969 by Morgan Stanley Capital International (MSCI), reflects the performance of mature economies such as the United States, Japan, the United Kingdom, and France, covering approximately 85% of the global stock market capitalization of industrialized countries!
In a previous article, I discussed a specific type of investment (BRICKS), and in another, I discussed a bank where to place your cash. This article focuses on an investment accessible to everyone, particularly aimed at those who ask: « What should I buy? » In short, this article is intended to enlighten beginners, who actually represent a majority of French people
ETFs (Exchange Traded Funds)
In French, it’s a fund traded on the stock exchange—a simple and accessible investment product that works like a basket of stocks. Imagine buying a single product that bundles together hundreds of companies (like Apple, Toyota, or L’Oréal) to track a stock market index. For example, the MSCI World represents the largest companies from 23 developed countries.
These investment funds are issued by institutions such as AMUNDI in France or BlackRock with its iShares brand in the United States. Generally speaking, they aim to replicate the movements of a stock market index, whether rising or falling. A stock market index is like a thermometer that measures the health of a group of companies on the stock exchange. The value of this index goes up or down depending on the performance of those companies.
What makes the ETF special is that it is passive: it automatically tracks the index without a manager actively choosing what to buy or sell. Imagine a robot that exactly copies the market’s performance, without trying to guess which stocks will go up or down. In active products, managers strive to achieve performance above their benchmark index.
The result? Fees are very low (0.06% to 0.50% per year), because there is no complicated management, unlike some funds where an expert makes decisions (and charges more)
ADvantages ETFs
- They can be easily acquired through any traditional or online bank and placed in various stock market accounts, such as ordinary securities accounts (CTO), equity savings plans (PEA), and even life insurance policies, for example.
- It’s a simple product to understand. For example, the MSCI World ETF tracks the performance of the MSCI World index, while the CAC 40 ETF follows the stock market index of the 40 largest French companies.
- There is a wide and varied choice of investments, as there are several types of ETFs: by geographic region, company size, strategy, or sector (such as healthcare). However, this article is aimed at beginners, so I will provide an analysis of the best ETF for a novice without exploring the different types of ETFs or examining the thousands of ETFs available on the market.
- These funds are highly liquid and continuously available, meaning they can be bought or sold at any time!
- Being passive products, these funds are incredibly affordable, especially compared to active products.
- These financial instruments regularly deliver stunning performance, outperforming their traditional counterparts!
Risks of ETFs
Discover the 3 biggest risks, easy to understand, that I will reveal to you in full transparency—even though I am not a financial advisor!
- The possibility of partial or total loss of capital due to a decline in the stock market indices on which the ETF is based
- In the case of investment in a foreign currency, the ETF will be subject to exchange rate fluctuations, which affect its returns.
- Tracking error: the performance gap between your ETF and the index it is supposed to replicate.
- Concentration risk: buying the same underlying stocks repeatedly (if you purchase many ETFs that hold overlapping positions)
Performance of the MSCI World index
Over an impressive 10-year period (2011-2021), the annualized performance reached an incredible +13.32%! That means an average of +13.32% per year! Since its launch on December 31, 1987, the annualized performance stands at +8.71%. We are witnessing a spectacular rise, from €80 in 2009 to over €400 in early 2022. However, past performance does not guarantee future results!
How to invest in an MSCI World ETF ?
Opening a dedicated account for stock market assets, such as a regular securities account (CTO) or an equity savings plan (PEA) with an online bank, is a recommended strategy. It is advisable to avoid traditional banks, which are not optimized for this type of investment. For me, they are mainly useful for obtaining a loan to buy your primary residence if you are planning to purchase one…
Listen carefully! The MSCI World ETF I am going to tell you about can be held within a PEA. So, I strongly recommend opening a PEA right now, even if you don’t plan to invest immediately! This savings plan offers incredible tax advantages linked to its holding period. It’s free, and the opening date will count toward benefiting from the tax advantages that kick in after 5 years. The MSCI World ETF is an opportunity to seize over the medium and long term!
I recommend the PEA for French residents; however, it is also possible to open a CTO, which does not offer the same tax advantages as the PEA but allows for a wider range of financial products, unlike the PEA, which is, in my opinion, quite limited.
Which online bank should you choose?
Discover the online bank that best suits you, whether it’s a subsidiary of a traditional bank or an independent neobank, often branchless! Opening a PEA is within your reach, with minimal fees and a wide selection of products. For my part, I manage several accounts (multi-banking), each with its own advantages and drawbacks, which I activate according to my purchasing needs. Boursobank stands out as an excellent option for a PEA, even with slightly higher fees, while DEGIRO proves to be a smart choice for a CTO dedicated to ETFs and foreign stocks, such as the MSCI World ETF.
Mon ETF préféré: le ETF MSCI WORLD
| Nom du produit | iShares MSCI World Swap PEA UCITS ETF EUR (Acc) |
|---|---|
| Code ISIN ETF MSCI WORLD | IE0002XZSHO1 |
| Link on Boursobank | https://www.boursorama.com/bourse/trackers/cours/1rTWPEA/ |
| Indice | MSCI World |
| Investment focus | Stocks, world |
| Fund size | EUR 203 M (Share class launch date: March 26, 2024) |
| Total Expense Ratio (TER) | 0,25% |
| Currency risk | Not hedged against currency risk |
| Distribution | Accumulating (automatically reinvests dividends received) |
| Fund domiciliation | Irlande |
| Fund promoter | iShares |
Buy my favorite ETF: MSCI World ETF!
You buy this MSCI World ETF just like you would buy a stock. Check on your bank’s website.
| Site names | Adresses web |
|---|---|
| Other link on justetf.com | https://www.justetf.com/fr/etf-profile.html?isin=IE0002XZSHO1 |
| Other link on sicavonline.fr | https://www.sicavonline.fr/index.cfm?action=fiche&code=0000X159206 |
| Other link on zonebourse.com | https://www.zonebourse.com/cours/etf/ISHARES-MSCI-WORLD-SWAP-P-168053339/graphiques/ |
This ETF stands out as an essential cost-effective option, with management fees of just 0.25% per year and a share price of around €5. Cherry on top: zero purchase fees on Boursobank are possible thanks to an exclusive partnership between iShares and Boursobank!
Here’s a captivating video that could either reinforce or completely overturn my ideas about the MSCI World ETF!
IMPORTANT DISCLAIMER
I am not a financial advisor. I share thoughts that I personally apply and am happy to pass along. This is not investment advice. The views expressed are summarized and mixed with personal reflections that are solely my own. These are ideas to consider; it is essential to educate yourself and seek multiple sources of information to make informed decisions. No buy or sell recommendations are made. Each individual must invest according to their investor profile, risk tolerance, budget, age, personal and family situation, level of financial literacy, and investment horizon. Everyone is responsible for their own financial decisions
