Inexpensive and high-yield: ETF savings plans
ETFs map a stock market index, ideally 1:1. A DAX ETF, for example, reflects the development of the leading German index, while a Dow Jones ETF reflects the development of the leading US index. In contrast to actively managed funds, which aim to outperform their benchmark index through constant restructuring, index funds passively replicate their benchmark index – Consequently, ETFs do not perform worse than the market.
With an investment in the global stock index MSCI World, you as an investor would have turned 10,000 euros into over 15,000 euros over the past ten years, with an investment in the German leading index DAX, this would have turned into more than 18,000 euros.
ETFs are also among the cheapest stock market products of all: The management fees for exchange-traded index funds are usually 0.15 percent to 0.50 per year, and for classic investment funds they are significantly higher at around 0.80 to 2.50 percent per year .
In connection with a savings plan, ETFs are therefore perfect for long-term asset accumulation and for investing money for children.
With an ETF savings plan, you as an investor invest a certain amount in an ETF on a regular basis, 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 25 euros per month.
How an ETF works, what you have to consider and how you set up an ETF savings plan, we reveal in the following guide articles: Buying an ETF, ETF savings plan and ETF dictionary.
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 then diversify your capital particularly broadly and, with a long-term investment horizon of 10, 15 or more years, have the chance of making a small fortune – your children will thank you.