When choosing an ETF, Mintos will consider the following factors:

Issuer reputation: The ETF must be issued and managed by an internationally recognized company (such as Amundi, iShares, Vanguard, etc.) with a good reputation and long-term experience managing billions in investor assets.
ETF size and age: The ETF must have sufficient assets under management, and/or have been on the market for a long time. These factors indicate greater liquidity and less price fluctuation.
Costs: The ETF must have low costs (also known as Total Expense Ratio, or TER). A low TER positively affects potential long-term profit.
Tracking error: The ETF must have a low tracking error. This means that the difference between the ETF’s returns and the returns of the index it emulates is small. A low tracking error indicates that the ETF is managed efficiently, reducing the risk of unexpected deviations that could impact investors’ returns.
Regulation: The ETF must comply with the EU regulatory framework for managing and selling mutual funds, UCITS (Undertakings for Collective Investment in Transferable Securities). This framework serves to protect investors by defining minimum standards for funds. These include limiting which assets funds can invest in, holding a diversified portfolio, transparency regarding costs, and safeguarding investor’s money. This can give investors additional confidence in ETF management and protection.
Dividend distribution and taxation: The ETF must be accumulating, which means all profits from dividends are automatically reinvested into the ETF. This is the best setup for most investors in Europe, as it could reduce tax burden and allow the deferral of tax payments until the ETF is sold (depending on your country of tax residence). The ETF must also be domiciled (i.e. legally incorporated) in a country that does not require withholding tax on profit distribution.
Replication: We’ll prefer physically replicated ETFs where available. This means that the ETF directly owns the stocks and bonds that comprise the index. This reduces the investors’ exposure to third-party risks.

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