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How to compare ETFs without affiliate bias
Every ETF comparison tool online has an angle — usually the affiliate fees of the platforms behind it. Ours doesn't. This page lists the metrics that actually drive returns, the metrics that look meaningful but mostly don't, and the red flags that no amount of marketing copy can hide.
The seven metrics that actually drive long-term returns
- TER (total expense ratio). 0.07% to 0.30% range for mainstream UK-listed ETFs. Compounded over 30 years, a 0.15% delta on £100k is roughly £15,000 of foregone return. Cheapest isn't always best (see tracking difference), but TER is the floor.
- Tracking difference (TD), not tracking error. TD is fund-return minus index-return. Tracking error is the volatility of that delta. TD is what you actually keep. The best ETFs have a TD smaller than their TER thanks to securities lending revenue. Some have a TD worse than their TER. Always check the KIID's past-performance table.
- Domicile. Ireland (most UK-listed UCITS), Luxembourg (some), or US (rarely accessible to UK retail under PRIIPs). Irish domicile saves 15% on US dividend withholding compared to non-treaty domiciles — a 0.15-0.20% annual uplift for US-heavy funds.
- Replication method. Physical full replication, physical sampled, or synthetic (swap-based). For retail investors, physical is overwhelmingly preferred. Synthetic adds counterparty risk for marginal cost savings that almost never matter.
- Fund size and age. Under £100m AUM and you're at meaningful liquidation risk — the fund could close, force you to sell, and crystallise CGT in a year you didn't plan to. Stick to funds with >£500m AUM and 5+ year history for core holdings.
- Liquidity (bid-ask spread). Check the spread during normal UK market hours, not in the first 15 minutes after 8am. A 0.05% spread on a popular ETF is fine; a 0.30% spread on a niche thematic is enough to wipe out a year of TER savings on every round-trip.
- UK reporting fund status. Without it, gains on disposal are taxed as income (up to 45%) instead of capital gains (24% max in 2026/27). All mainstream Irish UCITS have it; thematic ETFs from less-established issuers sometimes don't.
The metrics that look meaningful but aren't
- Distribution yield. Past dividends, not future ones. Tells you nothing about total return. Important only if you're optimising for cash flow (and even then, total return matters more).
- Number of holdings. 500 vs 1,000 vs 3,000 holdings. Beyond about 100 stocks, diversification benefits flatten dramatically. A fund of 500 isn't meaningfully less diversified than 3,000 for risk purposes.
- Inception date. A fund launched in 2008 vs 2014 isn't meaningfully different in 2026 unless one is materially smaller (see fund-size note above).
- Sponsor brand. Vanguard, iShares, SPDR, Invesco, Amundi, HSBC, Fidelity, Xtrackers — all are reputable for mainstream UK-available products. The differences between sponsors matter much less than the differences between products within each sponsor's range.
Red flags in ETF factsheets
Things that should make you walk away or at least dig deeper:
- "Strategy" or "Smart Beta" funds with TERs above 0.50%. The premium is rarely justified by long-term factor return after costs.
- Headline yields above 8% on equity ETFs. Either covered-call decay, distressed/value traps, or return of capital. Read the factsheet's coverage ratio carefully.
- Synthetic replication on equity indices. The cost saving over physical is typically <0.05% TER, which doesn't justify the counterparty risk for retail.
- Fund domiciled outside Ireland/Luxembourg for UK retail use. Tax outcomes get complicated; PRIIPs may block access entirely.
- No KIID / KID document available in English. Sometimes seen with very new niche launches. Walk away.
- "Total return" charts that don't specify dividend treatment. Compare apples to apples — net-of-fees, gross dividends reinvested, like-for-like benchmark.
The structured comparison method
For any two ETFs you're choosing between, fill in this table:
| Metric | Fund A | Fund B | Which wins |
|---|---|---|---|
| TER | ? | ? | Lower |
| 10-yr tracking difference | ? | ? | Smaller absolute value, ideally negative |
| Domicile | ? | ? | Ireland for US-heavy exposure |
| Replication | ? | ? | Physical |
| AUM | ? | ? | >£500m |
| Avg spread | ? | ? | Lower |
| UK reporting status | ? | ? | Must be Yes |
| Acc or Dist available | ? | ? | Match your wrapper |
Where one fund clearly wins on 5+ of the 8 metrics, pick it. Where it's split, the tie-breaker is usually TER on metric-1, AUM on metric-2.
What this site does not factor in
We deliberately don't rank ETFs, recommend specific tickers as "the best", or take affiliate fees from issuers or platforms. The reason: our incentive should be your tax outcome, not our commission. We give you the framework and the data; the ticker choice is yours.
If you want our editorial standards in detail, see editorial standards and how we make money.
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Every page is reviewed against the editorial standards, written from primary sources, sourced openly, and corrected publicly. No affiliate revenue. No sponsored content. No paid placements.