If I Only Need One Fund, Why Are There 2,000?

When I first opened my Avanza account, I saw the list of funds and nearly blacked out. There were dozens. And that was just the global ones. Why? Are we reinventing the planet? Is there a secret second Earth I haven’t heard about?

Turns out: No. It’s just capitalism being capitalism.

So here’s the deal.

---

1. They’re All Chasing the Same Index

Most “global” funds track something like the MSCI World Index — a giant basket of ~1,500 large companies in developed countries. So you’ll see multiple funds all mimicking the same benchmark.

But…

---

2. They Charge Different Fees

Fees (called “förvaltningsavgift” in Swedish) can make or break your returns over time. A 0.10% fee vs a 0.60% fee might not sound like much, but over 20 years, it can mean thousands of kronor difference.

Think of it as laundry detergent. They all clean your clothes, but some charge designer prices for the same soap.

---

3. Some Have an ESG Filter

That’s Environmental, Social & Governance (aka “companies that try not to be evil”). These funds avoid certain industries (fossil fuels, weapons, etc.) or give more weight to sustainable companies. It’s great if that matters to you, but sometimes it slightly reduces your exposure or bumps up the fee.

---

4. Different Currencies, Providers, and Countries

Some funds are hedged to SEK, some aren’t. Some are made by big banks (Swedbank, SEB), others by insurance companies or niche providers. Functionally, many are similar — but depending on your broker (Avanza, Nordnet), some might be easier to buy than others.

---

So… How Do You Choose?

1. Start with low fees – Under 0.30% is a good benchmark.
2. Check the index – Is it tracking MSCI World, or something niche?
3. Decide on ESG – Do you want ethical screening or not?
4. Stick with Swedish providers if you want ISK simplicity – Like AMF, Avanza, Länsförsäkringar, SPP, etc.

---

TL;DR

There are lots of global index funds, but you only need one.
It’s not about finding the best — it’s about picking a solid one and actually investing.

Let’s explain this a little more in the Swedish context, demystifying some of the Swedish finance jargon: Fund Picking in Sweden – Like Mushroom Picking, But for Your Wallet