Amundi Prime All Country World ETF: Low costs, but not without risks (Photo: freepik, rawpixel.com)
Warren Buffett, the doyen of investing, swears by low-cost index funds. The Amundi Prime All Country World ETF seems to fit exactly into this pattern – but is it really superior to established products?
Branded product or private label?
In the supermarket you are spoiled for choice: expensive labels or cheap own brands? Both serve the same purpose, but you can save money with your own brand – without often having to forego quality. The Amundi Prime All Country World ETF (ISIN: IE0009HF1MK9) works according to this principle. With a total expense ratio of just 0.07 percent, it undercuts even the cheapest counterparts and attacks top dogs such as MSCI or FTSE, which pay dearly for their well-known names.
Amundi takes a different approach: instead of working with the big players in the industry, the ETF provider works with them Solactive together, a cheap index provider. The lower license costs are passed on directly to investors – an advantage that can become clearly noticeable over the years through the compound interest effect.
Investors who follow this principle act in the spirit of Warren Buffett. In his will, the star investor recommends investing assets cost-effectively in index funds: “Most investors do better in the long term if they choose cheap funds and avoid expensive managers.” Advice that also pays off when choosing the Amundi Prime All Country World ETF might.
Broad diversification and thoughtful replication
The Amundi Prime All Country World ETF offers investors the opportunity to invest in a diversified manner in over 2,200 companies from developed and emerging markets. It physically tracks the Solactive GBS Global Markets Large & Mid Cap Index. Unlike synthetic ETFs, the fund actually buys the underlying stocks. This reduces the risk of deviations between fund and index performance and ensures transparency.
Low costs, but not without risks
As tempting as the low cost structure may be, investors should not ignore potential vulnerabilities. The ETF was only launched in 2024 – a crucial point for investors who rely on historical data. Compared to established heavyweights such as the MSCI World or the FTSE All-World, the Amundi ETF lacks this performance history. In addition, the underlying index contains fewer stocks than, for example, ACWI competitors. If larger positions weaken, this could have a greater impact on overall performance.
Second-tier quality?
Amundi consciously avoids big names and, with Solactive, relies on an index provider that is less known to the general investor community. That could unsettle conservative investors who trust the industry’s established names more. Nevertheless, Solactive is considered a competent provider whose products do not have to shy away from comparison with the competition.
Ultimately, the focus is on cost savings: the lower license fees mean that investors receive more returns – an unbeatable advantage in a world in which costs are often the deciding factor between success and failure.
Conclusion: ETF based on the Buffett principle for savers
The Amundi Prime All Country World ETF is the discounter among global ETFs – cost-effective, efficient and broadly diversified. This ETF is an interesting choice for investors who strictly follow the Buffett philosophy and pay attention to costs. Please note the somewhat small number of index members and the short history.
But Buffett would probably say: “Why pay more when the discounter is enough?” For everyone who shares this way of thinking, the Amundi Prime All Country World ETF could be a real profit maker – be it as an adjunct or as a core component of the portfolio.
Disclaimer:
Not investment advice. No call to buy or sell securities.