Born in 1997, retirement at 67, net salary in euros. I enter my data on a pension calculator on the Internet. The result is sobering: It will probably have nothing to do with my dream for old age, from my own home, the holiday home in the south and then have enough money to travel, shop, enjoy life. But as someone who was born shortly before the turn of the millennium, I have to be prepared that the statutory pension that I will receive when I retire in more than 40 years is far from sufficient.

An alternative plan is needed. It doesn't look very promising on the market: the Riester pension hardly yields any return. If I park my money in the overnight deposit account or savings account, I will even lose money with inflation in the long run - thanks to the zero interest rate policy.

One of the few correct alternatives is ETFs, i.e. exchange-traded funds. In contrast to actively managed funds, ETFs simply replicate an index, for example the Dax with its 30 values. Fees are low because no manager chooses the values. Based on the basic assumption that the economy has defied every crisis in the long term, ETFs appear attractive and safe.

This article comes from the "WirtschaftsWoche".

This is not the only way I see it. In recent years, ETFs have become a mass product.  

1.75 million ETF savings plans in Germany

More and more Germans are investing in ETFs. The extraETF portal had a good 1.75 million ETF savings plans in June this year. Last year there were a good 400,000 fewer ETF savings plans; six years ago, there were less than 160,000 savings plans. Where does the investor love for this financial product come from? What do you hope for from ETFs and what is important in trading?

Call Markus Jordan, Managing Director of ETF specialist Isarvest - he has to know his way around. "It is really difficult at the moment," he replies when asked what investors currently have as an alternative to investing in ETFs. "I can't think of any sensible alternatives." The only product that he thinks makes sense is real estate. But as a young person I can only save for a while without capital stock. Then there are the high real estate prices. ETFs would be easier for me. Jordan sees two main advantages for them: transparency and low costs. They are transparent because the development always exactly reflects the index, for example the Dax or the S&P 500. Investors can see how their investments are developing at any time.

"You can only get cheaper if you buy your own shares," Jordan says of the ETF fees. But that is much more cumbersome, especially if investors want to spread their money widely. For most ETFs, savers pay between 0.1 and 0.3 percent a year. This is significantly less than what you would have to pay active managers for the investment - a good 1.5 to 1.8 percent a year are due here. The manager must first make up the difference in costs so that the form of investment pays off for savers. And: Hardly an active manager has beaten the market for years.

Rush for ETFs in corona times

There was also a rush for ETF products during the corona crisis, although the indices lost a lot of their value during the course of the crisis. Consorsbank saw 23 percent more savings plans between late January and late June. The DKB speaks of a growth of a factor of 2.4 - more than a doubling - in the savings plans in the first half of 2020. Commerzbank also confirms that the growth in ETF savings plans has accelerated since spring. Comdirect recorded 55 percent more ETF savings customers in June than in the previous year.