12 Things to Check Before Investing in ETFs

Analyze ETFs like the top 1% of investors.

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Hey,

I have recently had a coffee chat with my friend who is a financial advisor:

We were both amazed how many people invest in ETFs blindly.

ETFs are great - simple, accessible, and diversified.

But the truth is:

Most retail investors have no idea what’s actually inside them.

If you want to be in the top 1% of investors, you need to know how to analyze ETFs properly before you buy.

Here’s the bare minimum you should check:

1. Market Region

Decide which market you want exposure to, such as:

US: S&P 500, NASDAQ 100.
Europe: EURO STOXX 600, FTSE 100.
Emerging Markets: MSCI Emerging Markets.
Global: MSCI World, FTSE All-World, S&P Global 1200.

2. Asset Manager

Check the issuer - BlackRock, Vanguard, Fidelity.

Stronger names usually mean better liquidity and reliability.

3. Total Expense Ratio (TER)

This shows total investment management cost.

For large ETFs, fees typically range from single to low double digits in basis points.

4. Fund Size

Larger funds offer higher liquidity and tighter bid-ask spreads.

5. UCITS Status

For European investors, UCITS is essential.

It ensures the ETF meets EU regulatory standards.

6. Special ETFs

Leveraged ETFs magnify both gains and losses.

Inverse ETFs move opposite to the underlying index.

Only use them if you fully understand the risks.

7. Benchmark

Know what the ETF tracks - equities, bonds, commodities, or a mix.

If you don’t understand the benchmark, you have no clear basis for performance.

8. Dividends

Some ETFs distribute, others accumulate.

Choose based on your tax and income needs.

9. Hedging

Check if the ETF is FX-hedged or unhedged.

For global exposure, this matters more than most realize.

10. Structure

Physical ETFs hold assets directly.

Synthetic ETFs use derivatives like swaps to replicate exposure.

Understand what you’re buying.

11. Share Class

Retail, professional, or institutional - each has different ISINs, fees, and characteristics.

12. Fact Sheet

Always review it.

It includes performance, domicile, rebalancing, compliance, and other data.

A well-researched ETF strengthens your portfolio.

An unreviewed ETF is essentially a random addition.

That’s one of the topics we will cover in the Investment MBA:

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To your success,
Igor