What are the best ETFs from the core selection of DEGIRO?
When investing in ETFs, the core selection of DEGIRO can be helpful as you won’t have to pay transaction fees on these ETFs. But what is the best ETF from the core selection? How do you choose from the hundreds of options on the list? In this article, we explore the possibilities.
What is an ETF?
Before we examine the best ETF from the core selection, let’s briefly discuss what ETFs are. An ETF is a fund that is traded on the stock exchange. An ETF passively tracks a certain index, allowing you to diversify your risks across different investment categories with one investment.
If you want to read more detailed information on what ETFs are, take a look at our comprehensive explanation:
What is DEGIRO Core Selection?
The DEGIRO Core Selection is a list of ETFs that you can buy and sell without transaction fees under certain conditions. This is only the case if you:
- Invest at least €1000 in the ETF
- Execute a maximum of one transaction on the ETF per month
Use the button below to open an account directly with DEGIRO & start investing in ETF’s directly:
What is the best ETF from DEGIRO’s core selection?
It is important to objectively determine the best ETF from DEGIRO’s core selection. What the best ETF is, is highly personal. Therefore, I have divided the overview into different categories so that you can quickly find what, in my opinion, is the best ETF in the relevant category.
Vanguard S&P500: Best for Investments in America
- Ticker: VUSA
- ISIN: IE00B3XXRP09
- Annual expenses: 0.07%
If you want to invest in America, the Vanguard S&P 500 is an excellent choice. With an annual expense ratio of 0.07%, you pay much less than with many other funds, and the S&P 500 has a proven track record of decades.
One disadvantage of the Vanguard S&P 500 is that you are only investing in America. However, because it includes the 500 largest American companies, you do have sufficient diversification across different sectors. If you also want to invest in other regions, you can choose to buy other ETFs as well.
All in all, the Vanguard S&P 500 is a suitable investment option for both novice and experienced investors.
Vanguard All-World: best for global investments
- Ticker: VWCE
- ISIN: IE00BK5BQT80
- Annual expenses: 0.22%
Many investors prefer a high dividend and therefore opt for a high dividend ETF. One of the best options in this category is the SDPR S&P USD Dividend Aristocrats. This ETF contains only American companies that have consistently increased their dividends for at least 20 years.
This ETF is therefore very suitable for investors who like to invest in stable companies. By buying the ETF, you can build up a nice passive income. However, investing in high dividend ETFs is not necessarily the best choice: reinvesting your dividend can be more expensive due to dividend leakage, and diversification is limited as growth stocks are not included in the fund.
Are you curious about other good dividend ETFs? In this article, we discuss which ETFs you can invest in if you value a high dividend.
- Ticker: IQQC
- ISIN: IE00B02KXK85
- Annual costs: 0.51%
The iShares China Large Cap is one of the best options if you want to invest in China. This is definitely an interesting option: the country has a large, emerging middle class, making significant growth possible. At the same time, the unpredictable government is a risk factor that you should certainly take into account.
In the iShares China Large Cap fund, you find the 25 largest Chinese companies that represent the Chinese stock market. With only 25 stocks, the diversification is limited, so it is wise to thoroughly research the specific companies in which you want to invest. In addition, with a cost of 0.51%, you pay significantly more than with other funds. However, an investment in iShares China Large Cap can be appealing if you are looking for more exotic investments.
If you would like to learn more about investing in China, refer to this article where we delve deeper into the situation in the country.
Invesco EQQQ NASDAQ-100 UCITS: best for innovative companies
- Ticker: EQQQ
- ISIN: IE0032079012
- Annual expenses: 0.3%
The Invesco EQQQ NASDAQ-100 UCITS proves that innovation is profitable, as this ETF has consistently outperformed the market. As you may know, high returns and high risk are inherently linked. The fund’s diversification is limited, with the top 10 stocks accounting for about 50% of its weight.
The technology sector is a driving force behind the fund’s performance. Technology stocks have performed well recently, making this ETF very profitable. If you have confidence in this trend continuing, investing in the Invesco EQQQ NASDAQ-100 UCITS can definitely be worth it.
If you want to read more about how to invest in the NASDAQ, check out this article for more details.
- Ticker: 2B76
- ISIN: IE00BYZK4552
- Annual expenses: 0.4%
If you don’t mind taking a big risk, investing in iShares Automation & Robotics can be an interesting option. With this ETF, you are capitalizing on a major trend: the rise and growth of automation and robotics.
This ETF has performed very well, with a return of over 20% annually. However, it is important to note that this fund is very risky, and the diversification is limited. A high degree of volatility is therefore to be expected when you buy this ETF. It is therefore advisable to diversify your investments across multiple ETFs to limit your risk.
- Ticker: IQQH
- ISIN: IE00B1XNHC34
- Annual expenses: 0.65%
The iShares Global Clean Energy ETF had a difficult start because the fund was launched just before the 2008 financial crisis. However, after that period, the fund has performed well, and with the increased attention to green energy, this trend could continue.
With a cost percentage of 0.65%, the iShares Global Energy ETF is far from the most affordable option. One advantage of investing in this ETF is that you can do it with a clear conscience. After all, you’re putting your money into a better future, and that’s worth something too!
SPDR Russell 2000 US Small Cap UCITS: best ETF for investments in small companies
- Ticker: ZPRR
- ISIN: IE00BJ38QD84
- Annual costs: 0.3%
If you’re looking for a way to invest in small companies, the SPDR Russell 2000 US Small Cap ETF is an excellent choice. With over 1,600 small stocks, of which the top 10 only have a limited weight, the diversification is superb. However, with the SPDR Russell 2000 US Small Cap, you only invest in American companies.
Over the long term, small companies have performed better on average than large companies. This makes sense, since it’s easier for a small company to grow significantly than for a large company. By investing in a broad ETF, you prevent putting all your money into a small company that may unexpectedly fail. With an annual cost percentage of 0.3%, this ETF is one of the best options for the investor who doesn’t mind taking some risks.
VanEck Vectors Semiconductor UCITS ETF: innovative fund
- Ticker: VVSM
- ISIN: IE00BMC38736
- Annual costs: 0.35%
Chips are indispensable for the future: they’re in our cars, phones, and even in our talking refrigerator. The demand for chips will only continue to rise: more and more people can afford expensive products, and more products require chips. The production process behind these chips is very precise, allowing the producers to earn a lot of money.
However, these high expectations are already partly reflected in the price of the VanEck Vectors Semiconductor ETF. If you want to invest in this ETF, it’s wise to keep a close eye on developments. Shortages, for example, can give the price a boost, but negative news can also cause the price to drop significantly.
Investing in this ETF is therefore only suitable for investors who are willing to embrace high risks with the prospect of high potential returns. It’s recommended to diversify your wealth over different ETFs since this is a very specialized fund.
What should you consider when choosing the best fund?
I hope the suggestions in this article can help you choose the best fund from DEGIRO core selection. The best fund for you depends largely on your preferences.
Risk tolerance
Consider for yourself whether you prefer a stable, lower return or a volatile, higher return. Investing in a broad ETF ensures that your losses are offset by profits in other funds, which means that your return will not be extremely high, but the chance of significant drops is also lower. If you invest in more innovative, risky markets, your return may be higher, but you must be able to accept strong fluctuations.
Costs
Once you have determined which market you want to invest in, you can compare the various funds. Be sure to pay attention to costs. ETFs are passive and follow a fund without analysts having to get involved. Therefore, it is not necessary to pick a more expensive fund; the cheapest fund is usually the best option.
Diversification
It is also recommended to investigate the diversification of the fund. Some ETFs invest in hundreds of companies, but in practice, the diversification may still be disappointing. This is the case when the weight of the largest companies in the fund determines a large part of the performance. Therefore, consider whether you prefer to spread as much as possible or whether you are looking for exposure to a certain sector or region.
Frequently asked questions
ETFs included in DEGIRO’s core selection are not necessarily the best choice. You typically buy ETFs for the long term, so you only pay transaction costs once every few years. When an ETF is not included in the core selection, it can still be interesting. Always compare the performance of the funds with each other: as an investor, a high return is ultimately the ultimate goal.
When choosing between two comparable ETFs, it is always wise to select the ETF from the core selection. By saving on costs, you can achieve a higher return.
If you invest in the core selection according to DEGIRO’s terms and conditions, you will not pay purchase and sale costs. This means that you invest a minimum of €1000 in the fund once a month.
However, this does not mean that you do not pay any costs for your investments. ETFs normally charge management fees: a certain percentage of your invested capital. There is also a spread: this is the difference between the buying and selling price of an ETF and also costs you money.
The core selection is a long list of ETFs that you can trade without transaction costs under certain conditions at DEGIRO. You must invest a minimum of €1000, and you can do this once a month per fund. Especially if you regularly invest in ETFs, this can save you a lot of money. Keep an eye on the core selection: DEGIRO regularly changes the offer.
