Warren Buffett has been recommending index funds to the average investor for decades. The reason is simple: 80–90% of active managers fail to beat the market over the long term, and those who do rarely sustain that performance. An index fund tracks the market at the lowest possible cost.
What is an index fund?
An index fund (also called a passively managed fund or index fund) tracks the composition and performance of a stock market index—such as the MSCI World, S&P 500, or Euro Stoxx 50—without trying to outperform it. Since it doesn’t require a team of analysts making active decisions, fees are drastically lower: 0.05–0.30% annually compared to 1–2% for active funds.
Difference between an index fund and an ETF
Both track indices, but they operate differently:
| Index fund | Index ETF | |
|---|---|---|
| Buy/sell | Once a day (net asset value) | In real time on the stock exchange |
| Tax-free transfer | Yes (between funds) | No (taxable upon sale) |
| Minimum investment | From €1 (some) | Price per share |
| Suitability | Long term, regular savings | Flexibility, trading |
For most long-term investors in Spain, traditional index funds are more efficient than ETFs because they allow for tax-free transfers between funds.
The best index funds available in Spain in 2026
MSCI World (global developed markets)
| Fund | TER | Where to buy | Minimum investment |
|---|---|---|---|
| Amundi IS MSCI World AE-C | 0.38% | MyInvestor, Openbank | €1 |
| Fidelity MSCI World Index Fund | 0.12% | MyInvestor | $1 |
| iShares Developed World Index Fund | 0.12% | MyInvestor | $1 |
| Vanguard Global Stock Index Fund | 0.18% | MyInvestor | $1 |
S&P 500 (large U.S. companies)
| Fund | TER | Where to buy | Minimum investment |
|---|---|---|---|
| Amundi IS S&P 500 AE-C | 0.30% | MyInvestor, Openbank | €1 |
| Fidelity S&P 500 Index Fund | 0.06% | MyInvestor | $1 |
| iShares US Equity Index Fund | 0.06% | MyInvestor | $1 |
| Vanguard U.S. 500 Stock Index Fund | 0.10% | MyInvestor | $1 |
MSCI All Country World Index (ACWI) — global including emerging markets
| Fund | TER | Where to subscribe | Minimum investment |
|---|---|---|---|
| Amundi IS MSCI ACWI AE-C | 0.38% | MyInvestor | €1 |
| iShares MSCI ACWI UCITS ETF | 0.20% | Trade Republic, Scalable | ETF Price |
| Vanguard FTSE All-World UCITS ETF (VWCE) | 0.22% | Trade Republic, Scalable | ETF Price |
Europe (Euro Stoxx / MSCI Europe)
| Fund | TER | Where to buy |
|---|---|---|
| Amundi IS MSCI Europe AE-C | 0.30% | MyInvestor, Openbank |
| iShares Core MSCI Europe UCITS ETF | 0.12% | Scalable, Trade Republic |
MSCI World or S&P 500?
This is the most common question. Direct comparison:
| MSCI World | S&P 500 | |
|---|---|---|
| Coverage | 23 developed countries (~1,500 companies) | 500 largest U.S. companies |
| Exposure to the U.S. | ~70% | 100% |
| 10-year historical return | ~10% annually | ~12% per year |
| Geographic diversification | High | None |
| Currency risk (€ vs $) | Mixed | Total |
The S&P 500 has outperformed the MSCI World over the past decade thanks to U.S. tech dominance (Apple, Microsoft, Nvidia, Amazon, Alphabet). However, the MSCI World offers greater geographic diversification. For most long-term investors, either is an excellent choice.
How to invest in index funds in Spain, step by step
- Open an account with MyInvestor — the platform with the most low-cost index funds available to Spanish investors, with no minimum investment and direct access to funds from Vanguard, Fidelity, and iShares.
- Choose your index — MSCI World or S&P 500 to start. Decide if you want exposure only to developed markets or to emerging markets as well.
- Set up a regular contribution — the DCA (Dollar Cost Averaging) strategy with automatic monthly contributions reduces the risk of buying at market highs.
- Don’t touch the money — the power of compound interest takes time. Recommended minimum time horizons: 5 years for the S&P 500, 7 years for the diversified MSCI World.
Historical benchmark returns
| Index | 10 years | 20 years | 30 years |
|---|---|---|---|
| S&P 500 (USD) | ~12% per year | ~10% per year | ~10% per year |
| MSCI World (USD) | ~10% per year | ~8% per year | ~9% annually |
| MSCI ACWI (USD) | ~9% per year | ~7% per year | N/A |
| Euro Stoxx 50 (EUR) | ~7% per year | ~4% per year | ~8% per year |
Past performance is not a guarantee of future results. Includes dividend reinvestment.
Frequently Asked Questions
Can I lose all my money in an index fund?
No. An MSCI World index fund invests in more than 1,500 companies across 23 countries. For it to lose all its value, all of those companies would have to go bankrupt simultaneously—which would amount to a total collapse of global capitalism. Historically, the MSCI World has never taken more than 15 years to recover its highs following a crisis.
What is the minimum amount of money I need to get started?
At MyInvestor, you can invest as little as €1 in index funds. The most important thing isn’t the initial amount but consistency: regular contributions over the years.
Do I have to pay taxes on index funds?
Only when you sell at a profit. And in Spain, you can switch between funds tax-free—you can switch from the MSCI World to the S&P 500 or to a money market fund without incurring any tax. You only pay taxes when you withdraw the money permanently.
Is MyInvestor safe?
MyInvestor is a bank (regulated by the Bank of Spain and the CNMV). The funds are your property and are held in separate custodial accounts. Cash in your account is protected by the Deposit Guarantee Fund (FGD) up to €100,000.