Many passive investors prefer to hold only a single global ETF. Should you hold a global ETF? I'll summarize my opinion, research, and experience in this article 😉
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⚠️ This article is not investment advice. The information in this article is for entertainment purposes only. Investing involves the risk of losing money! Past performance is not indicative of future results. !
Introduction
Should you hold a global ETF?
Many passive investors choose to allocate the bulk of their portfolio to a single global ETF. This strategy is simple, diversified, and easy to follow. But is it truly suitable for all investors?
In this article, I share my opinion, research, and experience with global ETFs. We'll see how they work, why US stocks play a significant role in them, and how they compare to an ETF tracking the S&P 500. 😉
What is an ETF?
An ETF (Exchange Traded Fund) is a publicly traded fund that allows investment in a range of stocks, bonds or other financial assets.
Most ETFs aim to replicate the performance of an index. For example, an ETF tracking the S&P 500 invests in the largest US companies. The investor is therefore not trying to select the best stocks or beat the market; they are simply tracking its performance.
This approach is also called passive investment. The objective is to hold a diversified portfolio over the long term and to benefit, if the markets progress, from the potential increase in its value.
The weighting of companies generally depends on their market capitalization. Larger companies therefore occupy a larger place in the ETF.
What is a global ETF?
A global ETF, also called a worldwide ETF, invests in companies from many countries and regions around the world.
Depending on the index tracked, it may include American, European, Japanese, Canadian, Australian, Chinese, or emerging market stocks. Its objective is to represent a large portion of the global stock market.
By holding a single global ETF, it is therefore possible to invest indirectly in thousands of companies active in different sectors and countries.
Depending on the index and the composition of the fund, one can find companies such as Apple in the United States, Nestlé in Switzerland, Air Liquide in France, or large Asian companies.
However, not all global ETFs are the same. Some cover only developed markets, while others also include emerging markets. It is therefore important to check precisely which index is being tracked before investing.
What are the fees for a global ETF?
The annual fees of an ETF are usually indicated by its TER (Total Expense Ratio).
For example, with a TER of 0.10 %, an investment of CHF 1,000 represents approximately CHF 1 in costs per year.
These fees are directly factored into the fund's performance. In other words, the investor typically doesn't receive a separate bill, but sees their return reduced.
Global ETF fees vary depending on the fund, the index tracked, and the replication method. Many global ETFs now offer relatively low TERs, often between approximately 0.06% and 0.25%.
In my opinion, a low TER is an important criterion, but it shouldn't be the only one. I target global ETFs with a TER of less than 0.15%. However, the fund's quality, size, liquidity, domicile, and the index it tracks also deserve consideration.
Why do US stocks make up such a large portion of a global ETF?
Almost all global ETFs have a heavy weighting in US equities.
In the majority of global ETFs, US equities represent approximately 60 to 70% of the total equity portfolio.
The strong presence of the United States in a global ETF is not an arbitrary choice by the manager.
Most global indices are weighted according to companies' market capitalization. As the US market is currently the largest in the world, US companies naturally represent a very large share of the index.
This weighting may seem very high, but it actually reflects the current size of the US stock market in the world. Many of the world's most valuable companies are listed in the United States.
The remainder of the portfolio, typically between 40 and 30%, is spread across numerous countries, including Japan, the UK, Canada, France, Switzerland, Germany, China, and other markets.
Here is an example of the country allocation of the Global VT ETF*.
It is worth noting that large American companies often generate a significant portion of their sales internationally. For example, a company like Apple or Coca-Cola is American, but a large part of their business is global.
What has been the historical return of a global ETF?
To illustrate the historical performance of a global ETF, let's take the example of VT, a Vanguard ETF that invests in companies located in many countries, including developed and emerging markets.
According to the data I analyzed, between March 2015 and March 2025, The VT ETF has achieved a cumulative return of approximately 100%, dividends reinvested.
This corresponds to an average annualized return of approximately 8.9% per year during this period.
This performance is interesting, especially when considering that VT offers broad geographical diversification.
Although the VT ETF invests primarily in the United States (approximately 62%), the ETF is not solely dependent on the US market: it also invests in numerous European, Japanese, Canadian, Asian and emerging market companies.
However, this result must be put into context. This increase was largely influenced by the very strong performance of the S&P 500.
In reality, since VT also holds markets that underperform the S&P500, its return has been lower than that of an ETF that only tracks the S&P 500.
The historical performance of the US market
Over the past few years, the US market has achieved very solid performance.
The S&P 500, which includes large American companies, has notably benefited from the growth of large technology companies and the economic importance of the United States.
In my historical analysis, the VOO ETF, which tracks the S&P 500, has achieved a return of approximately 182% over the same period compared with the Global VT ETF.
In reality, the VT ETF earned approximately 80% less than the VOO ETF tracking the S&P 500 over the same period. And depending on your initial portfolio amount, 80% less means several thousand dollars less over 10 years…
This performance is remarkable, but it should not be considered a guarantee for the future. Markets can experience periods of decline, stagnation, or underperformance lasting for several years.
How did other markets perform?
To compare the markets, I analyzed the main countries represented in the VT global ETF over a period from approximately March 2015 to March 2025.
The United States represented the largest share of the portfolio, followed by Japan, the United Kingdom, China and Canada, among others.
Japan also performed well, but less so than the United States, while other indices advanced more slowly.
Between March 2015 and March 2025, Here is the approximate performance of the five main markets represented in the VT Global ETF:
- United States: approximately +190 %
- Japan: approximately +120 %
- Canada: approximately +50 %
- United Kingdom: approximately +35 %
- China: approximately +15 %
This difference partly explains why the S&P 500 has outperformed global ETFs over the past decade.
In reality, the performance of the S&P 500 was simply better than other stock markets…
It is important to remember that past results do not guarantee future results.
Is it better to choose an S&P 500 ETF or a global ETF?
There is no universal answer. The choice depends in particular on the strategy, risk tolerance and convictions of each investor.
- A global ETF It offers broader geographical diversification. It allows investment in numerous countries and sectors with a single product. This solution may be suitable for those who wish to follow the evolution of the global market without having to choose which regions to focus on themselves.
- A S&P 500 ETF is more focused on the United States. It has achieved very good historical performance (better than a Global ETF), but it is more heavily dependent on the US economy and market and is therefore less diversified.
Here is a comparative table of the performance between the S&P 500 (in blue) and the VT ETF (in red), from April 2015 to April 2025:
However, this concentration needs to be qualified: many large American companies generate a significant portion of their revenue worldwide. The economic diversification of an S&P 500 ETF is therefore broader than its geographical distribution alone might suggest.
Note that it is also possible to combine a global ETF and an S&P 500 ETF. However, this strategy further increases the share of the United States in the portfolio, since US stocks are already widely represented in most global ETFs.
How to choose a good global ETF?
To compare several ETFs, it can be helpful to use a specialized comparator and analyze different criteria.
Here are the main criteria I consider important when choosing a global ETF:
| Criteria | Elements to analyze |
|---|---|
| TER (management fees) | Less than 0.15% |
| Diversification | At least 60% invested in the USA |
| Number of shares | More than 2,000 shares |
| historical yield | More than 8% annualized in 10 years |
| Fund manager | Vanguard, iShares or Invesco |
I really like Vanguard's VT ETF, like their Global ETF for example. It has very low fees, it's very well diversified, and Vanguard currently enjoys a very good reputation.
What percentage of a global ETF should one hold in their portfolio?
There is no ideal percentage for all investors. The allocation to a global ETF depends in particular on financial objectives, investment horizon, risk tolerance, and other investments already held.
Some investors choose to invest 100 % of thetheir stock portfolio in a single global ETF. This strategy is simple and allows for broad geographical diversification with a single product. Others prefer to allocate a significant portion to it, for example, 30 to 80% of their stock portfolio, then supplement with other ETFs.
My opinion
In my opinion, a global ETF can be a significant portion of a stock portfolio (between 20 and 70% of the portfolio), but must also be supplemented by:
- A US growth ETF (e.g., QQQ ETF or VOO ETF)
- an ETF from his region or country of residence (e.g., IMEU ETF)
It is also important to include a percentage in more defensive assets, in order to protect one's wealth, such as:
- a global bond ETF
- cash.
Summary: Global ETF or S&P 500 ETF?
Before concluding, here is a summary of the main differences between a global ETF and an ETF tracking the S&P 500.
| Criteria | global ETF | S&P 500 ETF |
|---|---|---|
| Geographic area | Several countries and regions of the world | Primarily the United States |
| Geographic diversification | Very high | More limited |
| Number of companies | Generally several thousand | Approximately 500 large American companies |
| Exhibition in the United States | Often greater than 60 % | Practically 100 % |
| Exposure to other countries | Yes, according to the index tracked | No, or very limited |
| Sectoral diversification | Large, with many sectors | Also large, but focused on the American market |
| Recent historical yield | 2015-2025 = approximately 9% | 2015-2025 = approximately 12% |
| Main risk | Depends on the evolution of global markets | Strong dependence on the American market |
| Desired profile | Investor seeking global exposure | Investor wishing to focus on the United States |
👉 In summary:
- A global ETF may be suitable for investors seeking significant geographical diversification and wishing to invest in multiple regions of the world with a single product.
- A S&P 500 ETF It may be suitable for investors who wish to concentrate their portfolio on large US companies and who accept a greater dependence on the US market.
- It is also possible to own both. However, it should be noted that a global ETF already has significant exposure to the United States.
Conclusion: Should you hold a global ETF?
A global ETF can be an attractive solution for building a simple and broadly diversified portfolio.
With a single ETF, it's possible to invest in thousands of companies across different countries and sectors. This diversification reduces dependence on a single economy, even though the United States generally retains a dominant position.
A global ETF does not specifically aim to maximize growth. Its main objective is to offer very broad diversification, combining stability, global asset allocation, and participation in market growth.
In my opinion, a well-suited global ETF (like Vanguard's VT, for example) is a good ETF to add to your portfolio. However, it's not the best choice for a very aggressive strategy, as some US growth ETFs (like the Nasdaq 100 QQQ ETF, for example) are better suited for a long-term growth strategy.
Furthermore, it is important to diversify one's assets with other more defensive assets (e.g., global bond ETFs, cash, real estate) in order to obtain more financial stability.
FAQ: Everything you need to know about global ETFs
Should you hold a global ETF?
A global ETF can be an attractive solution for investors seeking broad diversification with a single product. It allows investment in thousands of companies across numerous countries and sectors.
However, a global ETF is not necessarily suitable for all investor profiles. The choice depends in particular on financial objectives, investment horizon, risk tolerance, and the other assets held in the portfolio.
What is a global ETF?
A global ETF, also called a worldwide ETF, is a publicly traded fund that invests in companies located in several regions of the world.
Depending on the index tracked, it may include US, European, Japanese, Canadian, and Swiss stocks, as well as companies from emerging markets. Some global ETFs cover only developed markets, while others offer broader exposure.
Is a global ETF sufficiently diversified?
A global ETF can offer excellent geographical and sector diversification. Some global ETFs hold several thousand stocks spread across numerous countries.
However, not all global ETFs cover the same markets. It is important to check the index tracked, the number of companies held, and the potential presence of emerging markets and small-cap stocks.
Why do the United States represent such a large share of a global ETF?
Global ETFs are generally weighted according to the market capitalization of the companies. As the US market is currently the largest in the world, US stocks often represent about 60 to 70% of a global ETF.
This high weighting therefore does not necessarily result from a choice made by the manager. It primarily reflects the size of companies listed in the United States compared to other global markets.
How many stocks does a global ETF hold?
The number of stocks depends on the index tracked. Many reputable global ETFs hold between 2,000 and 4,000 companies.
The broadest ETFs, which also include small-cap companies (small capsHowever, they may hold more than 8,000 or 10,000 shares. The number of shares is an interesting criterion, but it is not sufficient on its own to assess the quality of an ETF.
What is the historical return of a global ETF?
The performance of a global ETF varies depending on the index tracked and the period analyzed.
In the example of Vanguard's VT Global ETF, the historical annualized return over the period studied in this article was approximately 9 % per year between March 2015 and March 2025, with dividends reinvested.
Past performance is not indicative of future results. A global ETF can experience years of growth, but also periods of decline or stagnation.
Is a global ETF more profitable than an S&P 500 ETF?
It depends on the period analyzed. Between 2015 and 2025, the S&P 500 has historically outperformed the VT global ETF.
An S&P 500 ETF is entirely focused on large US companies, while a global ETF also invests in other regions of the world. This diversification can reduce reliance on the US, but it can also limit returns when the US market outperforms other markets.
Future performance may, however, be different.
Is it better to invest in a global ETF or in the S&P 500?
A global ETF may be suitable for investors who wish to invest in several countries with a single product and benefit from significant geographical diversification.
An S&P 500 ETF may be suitable for investors who wish to favour large US companies and who accept a higher concentration on the US market.
There is no universally best choice. The decision depends on each investor's strategy, objectives, and risk tolerance.
Is it possible to hold a global ETF and an S&P 500 ETF at the same time?
Yes, it is possible to hold a global ETF and an S&P 500 ETF in the same portfolio.
However, it's important to understand that a global ETF already has significant exposure to US stocks. Adding an S&P 500 ETF therefore further increases the US allocation in the portfolio. This strategy represents more of an overweighting of the US market than a significant improvement in diversification.
What percentage of a portfolio can be invested in a global ETF?
There is no ideal percentage for all investors. Some choose to allocate 100 %s of their stock portfolio to a single global ETF, while others allocate between 20 and 80 %s before supplementing with other ETFs or assets.
The proportion depends in particular on the investment horizon, the level of risk accepted and other investments held.
It is also important to distinguish between a stock portfolio and total assets. A person may hold a large portion of their stocks in a global ETF while still maintaining cash, bonds, or other assets.
Which TER should I choose for a global ETF?
The TER represents the annual management fees of an ETF. The lower the TER, the less the fees reduce long-term returns.
In my opinion, a TER (Total Expense Ratio) below 0.15 % can be an attractive target for a global ETF. However, fees should not be the sole selection criterion. The index tracked, diversification, fund size, liquidity, and domicile should also be analyzed.
Which global ETF should I choose?
The choice of a global ETF depends on several criteria: the index tracked, management fees, the number of companies held, the presence of emerging markets, the size of the fund, its replication method and its domicile.
Global ETFs offered by Vanguard, iShares, or Invesco are often considered by investors. However, it is important to compare the current characteristics of each fund before making a decision.
Is Vanguard's VT ETF a good overall ETF?
VT is a highly diversified global ETF that invests in companies in developed and emerging markets. It also offers exposure to large, medium, and small companies.
In my opinion, VT is an interesting example of a global ETF thanks to its broad diversification and relatively low management fees. However, its US domicile and potential tax implications should be analyzed in light of the investor's country of residence.
Does a global ETF contain Swiss stocks?
It depends on the index being tracked. Many global ETFs hold Swiss companies such as Nestlé, Roche, or Novartis.
However, Switzerland's share generally remains small compared to that of the United States. A Swiss investor wishing to increase their exposure to the Swiss market can therefore choose to add an ETF specifically dedicated to Swiss equities.
Is a global ETF less risky than an S&P 500 ETF?
A global ETF is generally more geographically diversified, as it invests in multiple countries. This diversification can reduce the risk associated with a high concentration in a single economy.
However, a global ETF remains an equity investment. Its value can fluctuate significantly, and it can experience substantial declines during market crises. Therefore, global diversification does not eliminate the risk of loss.
Is it possible to invest solely in a global ETF?
Yes, some investors use a single global ETF as the basis of their stock portfolio. This strategy is simple, easy to manage, and offers broad diversification.
However, a portfolio composed solely of a global ETF remains fully exposed to equity markets. Depending on their objectives and risk tolerance, some investors may also hold bonds, cash, or other more defensive assets.
Is a global ETF suitable for long-term investment?
A global ETF can be suitable for a long-term investment strategy, as it offers exposure to many companies and several regions of the world.
However, stock markets can be volatile. Investors must be prepared to hold their investments for several years and accept periods of decline. Therefore, the investment horizon and the ability to withstand fluctuations are essential factors to consider.
⚠️ This FAQ does not constitute investment advice. ETFs carry a risk of loss, and past performance is not indicative of future results.
Should you own a global ETF?
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Should you own a global ETF?
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