📅 Last updated: 8 May 2026
· 🏷 Topic: ETF, portfolio, diversification
· 🇧🇪 For: Belgian investors
A frequently asked question from Belgian beginners: how many ETFs should I buy? 5? 10? 20? The answer is almost always: fewer than you think.
The short version
For most long-term portfolios, one to three ETFs are enough. More ETFs does not give more diversification — often only more overlap.
Three worked examples
1 ETF (simplest):
- VWCE or FWIA (FTSE All-World) — global equities, developed + emerging markets in a single fund.
- ~3,700 underlying positions.
- No rebalancing needed.
- One click per monthly purchase.
For anyone who wants absolute simplicity: this is enough. No shame in it.
2 ETFs:
- IWDA (88%) + EIMI (12%) — developed markets + emerging markets separately.
- Advantage: lower TOB on IWDA (0.12% vs 1.32% on VWCE).
- Disadvantage: you need to rebalance between the two once a year.
3 ETFs (advanced):
- IWDA (75%) + EIMI (12%) + small-cap ETF (13%).
- Adds a small-cap tilt — smaller companies that historically deliver slightly better returns over the long term.
- More work, marginal added value for most retail investors.
What you do NOT want
Mistake: 5 funds that do the same thing.
A common beginner mistake is a portfolio of:
- VWCE (world)
- IUSA (S&P 500)
- ESI0 (Eurostoxx)
- BEL 20 tracker
- Nasdaq 100
Sounds diversified. It isn’t. VWCE already contains ~62% US, ~13% European. Adding an S&P 500 doubles your US exposure. Adding a Nasdaq doubles your US tech exposure. Adding a Eurostoxx doubles your Europe exposure. Result: more concentration, not less.
What the math says
Studies show that ~30 randomly selected stocks are enough to diversify away most company-specific risk — what remains is systemic risk (the market itself), which you cannot diversify away by adding more names.
A world-index ETF has 1,300–3,700 positions — well above that diversification threshold. A second world ETF adds barely anything if the two track the same index.
What CAN justify extra ETFs
- Asset-class diversification — an equity ETF + a bond ETF + a real-estate ETF represent different sources of risk. That is real diversification.
- Geographic tilt — for example, extra emerging markets if you expect them to grow structurally faster.
- Factor tilt — value, quality, small-cap as added “flavour” on top of a world base.
Practical recommendation
Start with one world-index ETF. Add a bond ETF when you want a more defensive profile (typically 30+, or as your horizon shortens). Add a real-estate ETF (GVV) or an EM ETF only if you have a specific reason — not “for the diversification”.
💡 Simplicity scales. One ETF in your portfolio is not amateurism. It is often the most robust choice for anyone who wants to stay disciplined for 30 years.
The Belgian cost side of “one more ETF”
The diversification arguments above hold anywhere. In Belgium there is a second layer that rarely gets counted: every additional ETF is also a recurring taxable event.
- Stock-exchange tax per transaction. Each purchase of each fund is a separate taxable event. Topping up four ETFs monthly means 48 TOB events a year instead of 12.
- Rebalancing gets expensive. Returning to target weights means selling and buying — both carry stock-exchange tax, and since 2026 the sale can also trigger capital-gains tax above the €10,000 exemption.
- The rate differs per fund. A portfolio with one ETF at 1.32% and three at 0.12% has a very different cost profile from what the average suggests.
Worked example. €400 a month split across four ETFs of €100 each, all at 0.12%: 48 × €0.12 = €5.76 a year in stock-exchange tax. The same amount in a single ETF at 0.12%: 12 × €0.48 = €5.76. Identical — the tax is proportional, not per order. But put one ETF at 1.32% among them and that single quarter costs €15.84 a year against €4.32 for the other three combined.
So the conclusion is not “fewer ETFs is cheaper for tax”, but something more precise: the rate on each individual fund matters more than the number of funds. A portfolio of four cheaply taxed ETFs costs less than one expensively taxed one.
Frequently asked questions
Do I pay more stock-exchange tax with more ETFs?
Not automatically. The tax is a percentage of the amount invested, not a flat fee per order. Four ETFs of €100 cost the same TOB as one of €400, as long as the rate is the same. The rate per fund is what counts.
Does rebalancing make my portfolio more expensive for tax?
Yes. Rebalancing means selling and buying, both liable to stock-exchange tax, and since 2026 the sell side can produce capital-gains tax above the annual €10,000 exemption. Rebalancing with new contributions rather than sales largely avoids this.
Is a single global ETF the simplest option for tax?
Administratively yes: one rate, one position, no rebalancing needed. Whether it is also the cheapest depends on that specific fund’s rate — an accumulating global ETF on the FSMA list is taxed at 1.32%.
Sources
- Wikifin — Diversification and ETFs
- SPIVA Europe — Active vs passive study
- Curvo — Best ETF for Belgium 2026
Read also: a separate emerging-markets ETF (EIMI)
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