Adding one or more ETFs to your portfolio is quick and easy these days. We show you how it's done.
You should always start by choosing the right index fund. Brokers pay different licence fees to be able to offer ETFs. Therefore, there are sometimes big price differences between brokers for the same ETF.
Which ETF suits you best depends on your risk tolerance, financial leeway and investment objective.
Tip: If you do not have any experience with ETFs yet, you should orientate yourself towards the large and liquid ETFs on well-known indices such as the DAX, the Dow Jones or the MSCI World. These already offer very good diversification and are among the lower-risk variants with good return prospects.
If you want to receive regular payouts as additional income, you need to look for distributing ETFs.
If the ETF investment is intended more for the future as a retirement provision (Vermögenswirksame Leistung VL), accumulating index funds are the right choice.
Once you have decided on one or more ETFs, you now need to find the right broker.
Each broker has its own range of ETFs, usually consisting of 500 to 1,500 of the 6,500 ETFs available worldwide - so your desired index fund is only available from some providers. In addition, a different pricing model applies everywhere.
Therefore, compare the prices directly with each other and choose the one that is most favourable for you. If you are already a customer of a broker or a direct bank with brokerage, you can also buy ETF shares there - if possible.
The next step is to add the desired ETF to your portfolio. With all brokers, this can be done via the securities search screen. Either use the filter function or enter the ISIN directly.
Clicking on the ETF will take you to an overview and you can directly buy the corresponding number of shares.
Tip: It's not the entry point that counts!
If the prices are low at the moment - perfect. But don't drive yourself crazy! It is not the time of purchase that determines your potential return, but your staying power.
The DAX, for example, has achieved an average growth of 8% over the last 25 years. The longer you hold an ETF, the higher the return.
And with accumulating ETFs, the compound interest effect really comes into play after a few years.
A future-proof portfolio can only be realised with a broad risk diversification. For this purpose, securities from different markets, sectors and asset classes are included in the portfolio. For many private investors, however, this is a great challenge because they lack the knowledge, the capital or the patience. A passive index fund offers the opportunity to achieve a high level of diversification with just one investment.
Moreover, ETFs act like an anchor in one's own portfolio. Index funds are conservative investment products alike from products like CFDs with download mt4 exness. They do not aim to beat the market, but simply track the underlying index and thus generate average returns of 5 to 9% per year (before tax and TER). They are thus a counterbalance to active funds and aggressive trading strategies and can be used as a counterweight in one-sided portfolios.
