Inexpensive and profitable: ETF savings plans
ETFs track a stock market index, ideally 1: 1. A DAX ETF, for example, reflects the development of the leading German index, a Dow Jones ETF accordingly reflects the development of the leading US index. In contrast to actively managed funds, which aim to outperform their benchmark through constant restructuring, index funds passively replicate their benchmark – As a result, ETFs do not outperform the market.
With an investment in the world stock index MSCI World, you as an investor would have made 10,000 euros over 15,000 euros in the past ten years, with an investment in the leading German index DAX it would have turned into more than 18,000 euros.
In addition, ETFs are among the cheapest stock exchange products at all: the administration fees for exchange-traded index funds are generally between 0.15 percent and 0.50 per year, for classic investment funds they are significantly higher at around 0.80 to 2.50 percent per year .
In conjunction with a savings plan, ETFs are therefore perfect for long-term wealth accumulation and for the investment of children.
With an ETF savings plan, you as an investor regularly invest a certain amount in an ETF, for example every month or quarter. Many banks and online brokers offer savings plans on index funds free of charge and from a minimum investment of EUR 25 per month.
How an ETF works, what you have to consider and how to set up an ETF savings plan, we reveal in the following guide articles: Buy ETF, ETF savings plan and ETF lexicon.
Our recommendation: Set up a savings plan with an ETF on the world stock index MSCI World (more on this in the MSCI World-ETF guide). You will then spread your capital particularly broadly and, with a long-term investment horizon of 10, 15 or more years, you have the chance of a small fortune – your children will thank you for it.