Camille Van Vyve

02 Apr 2025

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How to invest in ETFs in Belgium? Comprehensive guide for 2025

ETFs, or exchange-traded funds, are a popular method of investing due to their simplicity, diversification, and cost.

What is an ETF, and why is it so popular?

An ETF (Exchange Traded Fund or tracker) is a financial product that tracks an index, sector, or asset class. Their popularity has surged worldwide, including in Belgium, due to their simplicity, low cost, and automatic diversification.

Advantages of ETFs

• Diversification: ETFs replicate the performance of a stock market index, meaning they cover a basket of securities. Buying one ETF share equals investing in the entire set of securities it includes.
• Low fees: Compared to actively managed funds, ETF management fees are usually below 0,20%. If you go through an intermediary, the costs increase by approximately 0.5% to 1%, but this is often half the costs charged by an active manager.
• Transparency: You know exactly where your money is going, as ETFs track public indices, and the underlying securities are always visible.
• Flexibility: ETFs can be bought or sold anytime during market hours at their market value, just like stocks.
• Performance: It is very difficult, if not impossible, to beat the market in the long term. Capturing market returns through ETFs is therefore a strategy that is both rational and efficient.

The impact of fees on performance

As the infographic below shows, a difference in fees of 1% per year can have a huge impact on an investor's portfolio over the long term.

Note: Comparison of the evolution of the capital of two investors each investing €100k for 40 years in a diversified portfolio of global stocks showing an average growth of 8% per year.

Why invest in ETFs in Belgium?

For Belgian investors, ETFs offer a straightforward way to build a diversified portfolio without the complexity of traditional funds. Specific Advantages for Belgians

1. Tax benefits: Accumulating ETFs, which reinvest profits instead of distributing dividends, enjoy a favorable tax regime. Capital gains are not taxed in Belgium, while dividends are subject to a 30% withholding tax.
2. Global access: Belgian investors can access a wide variety of ETFs listed on European exchanges (e.g., Euronext) or U.S. markets (NYSE, NASDAQ). Modern brokerage platforms enable easy investment in ETFs denominated in euros or dollars. However, it’s important to account for currency conversion fees and associated tax implications.
3. Regulatory simplicity: UCITS-compliant ETFs meet strict European regulations for transparency, investor protection, and risk management. These standards ensure safety and recognition across the EU.

How to choose the right ETF?

Key Selection Criteria

1. Type of Index: Do you want to invest in a global equity index like MSCI World or a sectoral one?
2. Total Expense Ratio (TER): Opt for an ETF with a TER under 0.30%.
3. Liquidity: Check trading volumes to ensure competitive pricing.
4. Geographical Exposure: Do you prefer ETFs focused on Europe, the U.S., or emerging markets?

Here’s a comparison table of popular ETFs to guide your choice based on your investment objectives:

Common mistakes when investing in ETFs

1. Focusing only on costs: While a low TER is essential, liquidity and UCITS compliance are equally important.
2. Ignoring tax implications: Accumulating ETFs offer more favorable tax conditions in Belgium compared to distributing ones, and they also benefit from the compounding effect.
3. Overlooking diversification: Avoid concentration in specific regions or sectors. A combination of global ETFs is often the safest bet.

Building a Balanced Portfolio with ETFs

Example allocation

• 40%: MSCI World for global exposure.
• 20%: European bond ETFs for risk reduction.
• 20%: Emerging markets ETFs to capture growth.
• 20%: Sector-specific ETFs (e.g., technology or healthcare).

Risks associated with ETFs

1. Market risk: ETFs track indices, so their performance is tied to the market. Diversification can mitigate this but cannot eliminate it.
2. Liquidity risk: Some niche ETFs may have low liquidity, complicating trades during volatility.
3. Tracking error: ETFs may not perfectly replicate their index due to management fees or portfolio adjustments.
4. Currency risk: For ETFs holding foreign assets, exchange rate fluctuations can impact performance. In 2024 for instance, the dollar strengthened, which favored investors in euros.
5. Issuer risk: Stick to ETFs from reputable institutions to mitigate risks related to the issuer's financial stability.

Why ETFs often outperform active funds

Studies show that 80% of active funds underperform their benchmark index over the long term. As the chart below shows, even Berkshire Hathaway, the financial company managed by the famous Warren Buffet, is doing worse than the market! He himself admits: ETFs offer often superior net performance thanks to their reduced fees and their passive strategy, which avoids transaction fees.

Note: Comparison of the S&P 500 Total Return index and the Berkshire Hathaway B Shares share price between September 30, 2002 and August 31, 2021.

Find out more on ETFs in our article "ETF: everything you need to know to invest better"

How to buy ETFs in Belgium?

Popular Platforms

• Degiro: Low-cost with a wide selection of ETFs. Ideal for experienced investors.
• Bolero: User-friendly for beginners, with higher fees but excellent educational resources.
• Keytrade Bank: A trusted local option with higher fees but great customer support.

DIY or use an intermediary?

• DIY platforms: Offer autonomy and lower fees but require financial knowledge and time.
• Intermediaries like Easyvest: Provide tailored management and tax optimization at competitive fees, making them ideal for investors seeking a hands-off approach.

ETF investment trends for 2025

1. Sustainable ETFs (ESG): Rising demand for funds combining financial performance with positive impact.
2. Sectoral themes: ETFs targeting sectors like AI and renewable energy are increasingly popular.
3. Bond ETFs: With higher interest rates, bond ETFs are regaining attention for stability and fixed income.

Why choose Easyvest for ETF investing in Belgium?

1. Ease of use: Intuitive platform for building and managing portfolios.
2. Optimized portfolios: Diversified ETFs selected for performance and compliance.
3. Competitive fees: Transparent and lower than many traditional options.
4. Personalized guidance: Expert support at every stage.
5. Tax advantages: Strategies tailored to Belgian tax regulations.

Start your investment journey with Easyvest and achieve your financial goals effortlessly. Feel free to contact our advisors to know more about our approach and our ETFs portfolios.

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