The cheapest MSCI World ETFs, ranked by TER

Most published rankings of MSCI World ETFs are a snapshot somebody took once and never revisited. Fees get cut, share classes launch, funds merge. The table below is read out of our database when this page loads, so it is the ranking as it stands today rather than the ranking as it stood whenever the page was written.

The fee spread is smaller than it looks

At the top of this table the difference between the cheapest fund and the tenth cheapest is a few basis points. On a 10,000 EUR position that is a couple of euros a year — real, but not the thing that will decide your outcome. The gap only starts to matter at the expensive end, where some share classes still charge several times the cheapest available fee for exposure to the same 1,400-odd companies.

So the honest advice is: do not agonise over the top five. Do check you are not holding something near the bottom.

Domicile is the part people skip

Nearly every fund here is domiciled in Ireland, with Luxembourg second and a handful in France. That is not an accident of geography — it is about withholding tax on the US dividends inside the index.

The US makes up roughly 70% of MSCI World by weight. An Irish-domiciled UCITS fund benefits from the Ireland–US tax treaty and suffers 15% withholding on those dividends; a Luxembourg fund generally suffers 30%. On a dividend yield of around 1.7%, that difference is worth something in the region of 0.15% a year — which is larger than the entire fee gap at the top of the table.

A Luxembourg fund charging one basis point less than an Irish one is, for most investors, the more expensive fund. Read the ranking with the domicile column beside it, not on its own.

Accumulating or distributing

Accumulating funds reinvest dividends inside the fund; distributing funds pay them out. Which is better is a question about your tax residence, not about the fund.

The assumption worth interrogating is that accumulating always defers tax. In Germany it does not: the Vorabpauschale charges a notional annual return on an accumulating fund whether or not it has distributed anything, so part of the deferral people are counting on has already been taxed away. Other countries treat the two share classes very differently again, and a fund that is efficient across the border may not be efficient where you file.

Where to go from here

The comparison that follows naturally from this one is the American part of the index on its own. Seventy per cent of MSCI World is the US, and when you buy that exposure directly the domicile argument above changes shape — some of those funds do not hold the shares at all. That is the cheapest S&P 500 ETFs.

To slice this list differently — by domicile, by size, by something other than fees — the fund pages carry the underlying data and the screener will filter on it.