Why invest in ETFs?

What is an ETF?

An ETF (Exchange Traded Fund) is an investment fund that automatically replicates a stock market index — for example, the 1,400 largest global companies.

Concretely, buying a share of IMIE means buying a fraction of Apple, Microsoft, Nestlé, Samsung, Toyota and 8,999 other companies in a single transaction. Your capital is instantly diversified on a global scale.

Two characteristics distinguish ETFs from traditional funds:

• They are tradable on the stock exchange like an ordinary share
• Their annual fees are tiny: between 0.07% and 0.20% per year, compared to 1.20% to 2.50% for an actively managed fund

The power of diversification

Instead of betting on a single company, an ETF allows you to own a fraction of hundreds or thousands of companies simultaneously. If one company goes bankrupt, the impact on your portfolio is negligible.

It's not a question of the manager's talent. It's a mathematical question. Over 30 years, every euro taken in fees is a euro that no longer compounds. The effect is exponential: fees don't just reduce your return by 1.5% — they reduce your final capital by 25 to 35%.

The cost advantage

Traditional banking funds often charge between 1.5% and 2.5% in annual fees. An ETF like those recommended here costs between 0.07% and 0.20% per year. Over 30 years, this difference in fees can represent more than 30% of your final capital.

Management fees are the only variable you can control with certainty. Predicting the future of the market is impossible; reducing your costs is a guaranteed return.

The practical conclusion: paying 1.5% in additional fees for active management is paying for a promise that statistics prove is rarely kept over the long term.

Why banking products can't keep up

Classic savings products suffer from three structural handicaps compared to ETFs:

So, banking products are useless?

That would be false. Banking products have their place — but a precise and limited place.

A savings account is irreplaceable for your emergency fund: 3 to 6 months of expenses, available immediately, without risk of capital loss. This is its legitimate function.

Beyond this security reserve, every euro left indefinitely in a savings account is a euro that underperforms.

« The question is not 'savings or investment?' It's 'what part of my savings needs to be liquid and risk-free?' »

The Belgian context — why it's even truer here

Belgium presents a particularly unfavourable combination for the passive saver:

• The four major banks (BNP Paribas Fortis, KBC, Belfius, ING) control the majority of deposits and pass on rate increases slowly and partially to savings accounts
• Pension savings funds show TERs of 1.25% to 1.50%, among the highest in Europe for this type of product
• Stock exchange tax (TOB) is 0.12% for accumulating ETFs domiciled outside Belgium (in the EEA) — which covers almost all ETFs recommended here. For funds registered in Belgium, it rises to 1.32%, which significantly changes the game.
• Since 1 January 2026, capital gains on equity ETFs are subject to a 10% tax beyond an annual allowance of €10,000 per taxpayer. This is a moderate burden compared to many neighbouring countries, and the first €10,000 of annual gains remain exempt.