Buy MDAX ETF: Benefit from the potential of small caps
With ETFs on the MDAX, you as an investor can easily benefit from the price development of “secret stock market stars”. In short, it works like this: Exchange-traded funds (ETFs), i.e. exchange-traded index funds, ideally replicate an index 1:1, for example the DAX, MDAX or the MSCI World. If the underlying index rises by one percent, then your ETF (ideally) also rises by one percent.
But not all MDAX ETFs are the same; the performance of one small cap ETF can differ. In addition to the fees that cost performance, the following factors also determine how precisely an ETF tracks the price development of the underlying index:
First, there are differences in how an index is replicated in detail. On the one hand there is the physically replicating ETFs (direct replication), which buy and sell the original stocks listed in the underlying index. At the so-called optimized sampling only the most important stocks in the index are bought, at a full replication all stocks are bought according to their weighting in the underlying stock index. at synthetically replicating ETFs (indirect replication) On the other hand, the issuers (ETF providers) do not buy the shares contained in the underlying index – you can find out exactly how this works and more about the different replication methods in our guide articles Buy ETF, DAX ETF and ETF savings plan.
Important: As with all stock market investments, you should note that past gains are no guarantee of future gains. MDAX ETFs are also subject to market fluctuations. An MDAX ETF is not suitable as a basic investment, nor is a DAX ETF. Experts advise against individual country indices as a basic investment. In a well diversified portfolio, however, one serves MDAX ETF as a powerful yield catalyst.