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ETFs: how to read a fund profile
An ETF is a basket you can read like an open book, every fee, holding and exposure is published. The skill is knowing which fields actually matter. We'll walk two real examples from justETF: a global equity ETF and a physical gold ETC, deliberately different, so the same checklist works on anything.
The two examples
| Field | iShares Core MSCI World (SWDA) | Invesco Physical Gold (SGLD) |
|---|---|---|
| ISIN | IE00B4L5Y983 | IE00B579F325 |
| Type | ETF (UCITS fund) | ETC (commodity note) |
| Tracks | MSCI World, 1,281 stocks | Gold spot price (USD) |
| TER (annual cost) | 0.20% | 0.12% |
| Fund size (AUM) | €124B | €23B |
| Replication | Physical, optimized sampling | Physically backed metal |
| Distribution | Accumulating | Accumulating |
| Domicile | Ireland | Ireland |
| Currency | USD | USD |
| Inception | Sep 2009 | Jun 2009 |
Figures via justETF, indicative and change over time, always check the live profile before acting.
The key parameters, and why each matters
Product type: ETF vs ETC
SWDA is a UCITS fund: your money buys a slice of a ring-fenced basket of shares, legally separate from the provider. SGLD is an ETC, technically a debt note backed by physical gold in a vault. Both are collateralized, but an ETC carries an issuer/structure you should understand: check it's physically backed (SGLD is, at J.P. Morgan) rather than synthetic. Rule: know whether you're holding a fund or a note.
TER, total expense ratio
The annual cost, skimmed daily. SWDA 0.20%, SGLD 0.12%. Sounds tiny; it compounds. On €10,000 over 20 years, 0.20% vs a 0.50% fund is roughly €1,000+ of difference, for the same index. Cheaper isn't automatically better, but for a plain index exposure, TER is the first number to compare.
Replication method
- Physical (full): the fund actually holds every constituent. Simplest, most transparent.
- Physical (sampling): holds a representative subset, SWDA does this, normal for a 1,281-stock index. Introduces tiny tracking difference.
- Synthetic (swap): uses a derivative to mirror the index. Cheap and precise, but adds counterparty risk. Prefer physical unless you know why you want synthetic.
Distribution policy: Accumulating vs Distributing
Both examples are Accumulating (Acc): income is reinvested inside the fund, compounding automatically and often deferring tax. A Distributing (Dist) version pays dividends to your account, useful if you want cash flow. Same index, two share classes: pick Acc to grow, Dist to draw income.
Domicile
Both are domiciled in Ireland, not a detail. Irish-domiciled funds benefit from a US tax treaty that cuts withholding tax on US dividends (from 30% to 15%), which matters a lot for a US-heavy fund. For a European investor, Ireland/Luxembourg domicile is usually the tax-efficient default.
Fund currency vs. your currency
Both quote in USD. A common myth: "USD fund = currency risk for me." What actually drives your currency exposure is the underlying assets, not the quote currency. SWDA is ~68% US companies, so you carry USD exposure regardless of whether you buy the USD or EUR line. A "EUR-hedged" share class removes that, at a cost. Know the difference between fund currency and true exposure.
Fund size (AUM)
€124B and €23B, both huge. Larger AUM generally means tighter spreads, better liquidity and far lower risk of the fund closing and forcing you to sell. Be wary of tiny funds (under ~€100M): more likely to be liquidated.
How to read the top holdings & concentration
This is where a fund's name can lie to you. SWDA is a "World" fund, but look at what's actually inside:
| # | Holding | Weight |
|---|---|---|
| 1 | NVIDIA | 5.42% |
| 2 | Apple | 5.09% |
| 3 | Microsoft | 3.53% |
| 4 | Amazon | 2.91% |
| 5 | Alphabet A | 2.46% |
| 6 | Broadcom | 2.23% |
| 7 | Alphabet C | 1.93% |
| 8 | Meta Platforms | 1.54% |
| 9 | Tesla | 1.36% |
| 10 | Micron | 1.22% |
The top 10 are all US mega-cap tech, ~28% of the whole fund. A "global" tracker is, in practice, heavily a US-tech bet. That's not wrong, it's what the market-cap index dictates, but you should know it, so you don't buy the same NVIDIA exposure three times across "different" funds. SGLD has no holdings table: it's a single asset (gold), concentration by design, zero diversification, but a genuine diversifier against equities.
Exposure: country & sector
Below the holdings, the profile breaks exposure down. For SWDA:
| Country | Weight | Sector | Weight |
|---|---|---|---|
| United States | 68.4% | Technology | 30.9% |
| Japan | 5.6% | Financials | 13.4% |
| United Kingdom | 3.1% | Industrials | 10.2% |
| Canada | 3.0% | Consumer Disc. | 9.3% |
| Others | 20.0% | Others | 36.3% |
Two things to check every time: home-country weight (68% US here, are you doubling up if you also hold an S&P 500 fund?) and sector concentration (31% tech, how correlated is this with your other positions?). Real diversification is about combined exposure, not fund count.
The read-it-in-60-seconds checklist
- Cost: TER, and tracking difference vs the index.
- Structure: ETF or ETC; physical or synthetic.
- Income: Accumulating or Distributing.
- Tax: domicile (Ireland/Lux for EU investors).
- What you actually own: top-10 weight, country and sector concentration.
- Durability: AUM large enough to stay open and liquid.
Educational market information, not financial advice, and not a recommendation to buy any specific fund. Figures are indicative and change, verify on the live profile. Markets carry risk of loss.