How to Pick the Best ETFs: The 4-Step Banker Audit That Filters 90% Out

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How to Pick an ETF: The Four Checks Institutions Run

Stop choosing an ETF by its expense ratio. The TER is the cost the fund promises; the tracking difference is the cost it actually delivered, and it can be lower than the TER — sometimes negative — because funds earn money lending out their shares. Then check three more things: fund size (below roughly €500m you are carrying closure risk), physical rather than synthetic replication for your core holding, and, if you are European buying US exposure, that the fund is domiciled in Ireland rather than Luxembourg. That last one is worth more than every basis point of fee you will ever negotiate.

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