Trade Republic savings plan recommendation: ETFs for long-term growth
If you want to invest in ETFs, you need a custody account with a broker or bank. Trade Republic is often a popular choice for beginners in particular due to its low fees. You can now save in over 2.000 ETFs here. You can often invest in these ETFs free of charge in the form of a savings plan and build up your assets in this way. In this article, we show you our Trade Republic savings plan recommendation and what you should consider when investing!
In brief:
- We show you what advantages and disadvantages you can expect if you want to set up a savings plan with Trade Republic
- You get a list of the best 40 ETFs at Trade Republic for different investors: whether beginner or advanced
- You should definitely pay attention to these 6 aspects when choosing a specific ETF
- We will show you which type of ETF is suitable if you want to pursue a specific investment objective: whether it’s retirement provision, wealth accumulation or environmental protection
Trade Republic savings plan recommendation – advantages, disadvantages and examples
In this section, we take a closer look at the advantages and disadvantages of a savings plan with the provider Trade Republic before naming some ETFs that could be suitable for long-term wealth accumulation.
Trade Republic savings plan advantages
Low costs: The provider is popular due to its low costs. You can set up a savings plan free of charge, with no order fees. The minimum amount is 25 euros, which enables everyone to build up assets in the long term. Even if you can or only want to deposit small sums.
- This makes the provider ideal for beginners who want to try out investing first
- In addition, you can save costs due to the low fees and thus increase your overall return
Large ETF selection: The provider provides you with over 2.000 ETFs. This means that you have a huge choice and can be sure to find the right ETF for your financial goals and priorities. Here you will find ETFs from specific countries, sectors or global ETFs if you are a beginner and want to diversify as broadly as possible. Every investor can find what they are looking for in this selection.
Simple, easy-to-understand user interface: From the very beginning, it was important to Trade Republic to make investing as easy as possible so that anyone can invest their money. This includes a structured design with an intuitive user interface so that no problems can arise. Whether on the web or on a smartphone – anyone can start investing easily!
Flexibility: One of the biggest advantages of savings plans is their high degree of flexibility:
- Do you have unexpected expenses this month? No problem, you can simply reduce or even pause your savings plan for the coming month
- For example, have you received money as a gift and would like to increase your savings plan for just one month? You can easily do that too
- With a savings plan at Trade Republic, you have a high degree of flexibility and can adapt your investments to your financial situation at any time
High transparency: Trade Republic offers investors a high level of transparency. On the website you will find all the costs that may be incurred so that you can get an overview and don’t have to worry about hidden costs.
Security: This aspect is perhaps the most important: Trade Republic has a full banking licence and is also regulated by BaFin. Both go hand in hand with a significantly higher level of security. It is therefore a reputable provider.
Trade Republic savings plan disadvantages
- No access to all stock exchanges: The provider only offers you access to certain stock exchanges. This can limit the choice of securities for trading. If you are interested in a specific security, you should first check whether the provider makes it available. If not, there is no way to trade this security with Trade Republic.
- Restricted trading hours: At Trade Republic, you can only trade during peak trading hours from 7:30am to 11:00pm. This means that you cannot buy or sell outside of these hours, which could be restrictive in some situations.
- No comprehensive analysis tools: Compared to some other brokers, Trade Republic offers less comprehensive tools for analysing securities. If you want to carry out an in-depth analysis of your investments, you may come up against limits here.
Trade Republic best ETFs: Our recommendation
Below we have compiled a list of ETFs that meet our criteria. Some of these are very different and are aimed at different investors with different investment objectives. It’s worth noting that not every ETF on the list is suitable for beginners!
As a beginner, you should build up a broadly diversified portfolio. Diversification offers you the opportunity to spread risks. But what does that mean?
- Investing your assets in a single share is highly risky
- For example, the company may run into financial difficulties or even have to file for insolvency
- In the worst case scenario, you could lose all your assets this way
If you instead invest in an ETF that contains numerous positions, such problems are much less likely. A possible insolvency of one company could be ‘absorbed’ by the profits of other companies in the portfolio. This diversification or spreading of risk can significantly reduce the risks of a portfolio by investing in a large number of positions.
However, it is not enough to focus solely on ETFs that contain several positions: These should also be as diverse as possible. For example, if you only invest in companies from one particular country, there may be regional problems, such as political regulations that affect companies or natural disasters. The same applies to sectors.
Good to know:
As a beginner, you should build up a portfolio that is as diversified as possible in order to reduce the risks in your portfolio. Invest in a large number of companies from different countries and sectors to counteract possible risks and increase the security of your portfolio.
Some investors who have already built up a diversified portfolio and accumulated some knowledge are also interested in thematic ETFs. These specialise in certain themes or countries. They often offer the chance of attractive returns, but are also significantly riskier due to their specialisation and are therefore not suitable for beginners.
One example of an ETF with a very attractive performance is the iShares NASDAQ 100 UCITS (Acc) (IE00B53SZB19), which you can invest in at Trade Republic. The NASDAQ 100 invests in the 100 largest shares by market capitalisation and focuses on technology companies.
In recent years, technology companies have enjoyed strong growth, which has also been reflected in the performance of these ETFs. This ETF currently contains 101 positions and is fully replicated. The TER is currently 0.33 per cent, while the fund size is over EUR 14,093 million. The NASDAQ 100 is known for its particularly high returns.
Another top ETF is the iShares MSCI ACWI USD (Acc) (IE00B6R52259). We have included this ETF in the list due to its broad diversification. The abbreviation ACWI stands for ‘All Country World Index’. The ETF invests in almost 2,500 companies and has a fund size of 13,125 million euros. The TER is 0.20 per cent.
This ETF covers industrialised and developing countries. Around 15 per cent is invested in developing countries, which ensures broad diversification. It is worth mentioning the comparatively high weighting of American companies at approx. 57 per cent, which limits diversification somewhat.
- This is an accumulating ETF, which means that any profits realised are reinvested
- The price/earnings ratio of 20.61 is also quite respectable
We don’t want to withhold a typical classic from you. Some investors want to build their portfolio as simply as possible, preferably with just a single ETF. Others want greater flexibility and to choose their own weighting of industrialised and emerging markets, for example. Hence our next suggestion: ETFs on the CORE MSCI World USD (Acc).
- At Trade Republic you can invest in the iShares Core MSCI World USD (Acc) (IE00B4L5Y983)
- ETFs on the core MSCI World impress with their attractive performance and invest in large and medium-sized companies in industrialised nations
The iShares invests in almost 1,500 companies with a fund size of 72,129 million euros. Profits are reinvested and the TER is 0.20 per cent. Replication is achieved through optimised sampling and the P/E ratio is 21.53. If you want to build your portfolio with several ETFs, you have the freedom to choose the weighting of developing and industrialised nations yourself and adjust it if necessary.
Trade Republic best dividend ETFs
Many investors specifically look for dividend ETFs that are characterised by a high payout ratio. They are particularly suitable for certain strategies. Below we show you the 3 best dividend ETFs at Trade Republic.
One option for an index with particularly high payout ratios is the MSCI World Energy. Specifically, you can invest in the iShares MSCI World Energy USD (DIST) (IE00BJ5JP105) at Trade Republic. As the name suggests, this ETF focusses on companies from the energy sector.
The ETF contains 57 positions with a fund size of 667 million euros. The TER is low at 0.18 per cent and replication is complete. The 10 largest positions cover 58 per cent of the ETF. They include typical companies from the energy sector, such as Exxon, Chevron, Shell and Total Energies.
Another option is the iShares European Property Yield UCITS (Dist) (IE00B0M63284). This ETF could help you to increase your diversification if you already have a broadly diversified portfolio. It invests in property companies and real estate investment trusts within Europe, excluding the UK.
This ETF could be an option for investors who are particularly interested in the property sector. With 57 positions, the ETF is not particularly diversified, which should be taken into account. The TER is 0.40 per cent and it is fully replicated. The distribution yields are currently over 3 per cent (as at 2024).
The iShares MSCI World Quality Dividend ESG UCITS ETF (Dist) (IE00BYYHSQ67) offers a third option. This ETF focuses on global companies with above-average dividend yields and quality characteristics. The fund is made up of 177 positions from companies worldwide.
The TER is 0.39 per cent and the fund size is 681.14 million euros. American companies are particularly well represented with a share of over 50 per cent, followed by companies from Switzerland with less than 8 per cent.
A special feature of this ETF is its fulfilment of the ESG guidelines. These are special guidelines that make ethical investing possible. Securities can only be labelled with this abbreviation if they fulfil special sustainable and social criteria. This can be particularly interesting for people who care about sustainability.
Choose the right ETF at Trade Republic
Choosing the right ETF can be difficult as there is so much choice. In this section, we look at specific recommendations for specific investment objectives, what you should consider when making your choice and how Trade Republic compares to other providers.
ETFs for different investment objectives
Your choice of ETF should be based on your personal investment goals and your level of knowledge. Below we show you which recommendations might be suitable for certain goals.
- Asset accumulation: Broadly diversified ETFs that track a global market index are particularly suitable for long-term wealth accumulation. The Core MSCI World ETF and the iShares Core S&P 500 ETF are excellent examples of this.
They offer broad diversification across different regions and sectors and are suitable for beginners. They are also known as ‘world ETFs’ and focus on ensuring the highest possible diversification. Thematic ETFs are less useful here.
- Retirement provision: ETFs with a high dividend payout could be interesting for retirement provision. The STOXX Global Select Dividend 100 or the Euro Dividend ETF could be interesting options for you here. Global ETFs and long-term asset accumulation are also suitable if you want to make provisions for old age.
- Sustainability: In the wake of the environmental crisis, sustainability is becoming increasingly important. If this topic is close to your heart as an investor, there is a special selection of ETFs.
For example, there are ETFs that are subject to the so-called ESG regulations (Environmental, Social, Governance). Companies only receive this designation if they fulfil certain environmental and social criteria.
- Technology sector: For a specific investment in the technology sector, the iShares Nasdaq 100 or the iShares TecDAX ETF are a good choice. They include many of the largest and best-known technology companies.
These are thematic ETFs that focus exclusively on the technology sector. They are therefore less broadly diversified and only make limited sense for beginners.
- Emerging markets: If you have a higher risk appetite and want to focus on the economic development of emerging markets, the Core MSCI EM ETF would be an option.
This ETF invests in a broad range of companies from emerging markets. Such ETFs allow you to further increase your diversification by taking numerous other positions into account.
6 tips for choosing the right ETFs
Have you decided to take control of your finances and are convinced by the advantages of ETFs? You may now be a little overwhelmed by the numerous possibilities and options.
No problem! Here we show you the most important tips you should consider when choosing the right ETF so that you can make the right decision and build up your assets in the long term.
- Understand your investment goals: Before you invest in ETFs, you should be clear about your investment goals. Do you want to build long-term wealth, save for retirement or support a specific theme such as sustainability or technology? Your goals will determine the type of ETFs you should invest in.
- Pay attention to the costs: The total expense ratio (TER) is an important factor when selecting an ETF. The lower the costs, the more of your return you retain. When making your selection, make sure that the costs remain as low as possible. Exotic themed ETFs in particular are associated with higher costs. Beginner-friendly ETFs, such as world ETFs, are characterised by particularly low fees.
- Consider diversification: To minimise your risk, you should invest in several different ETFs that cover different markets and sectors. A well-diversified portfolio can help you to better manage market fluctuations and counteract risks. Therefore, check how many positions, countries and sectors your ETF covers.
- Check the fund volume and age: A large fund volume is usually a sign of an established and liquid ETF. Smaller funds can be more prone to liquidity problems, which can lead to larger price deviations from the net asset value. In addition, smaller funds may not be profitable enough for the provider and may be closed again. A reallocation is associated with higher costs. The same applies to the age of a fund.
- Build up a financial cushion: Before you start investing, you should build up a reserve fund. This will serve as a safeguard should unforeseen financial expenses arise. You should usually save 2 to 3 net salaries to prepare for such situations. In the worst-case scenario, you won’t have to sell shares in your ETF.
- Pay attention to the replication method: ETFs can either physically or synthetically replicate the index they track. Physical replication is often considered safer, while synthetic replication comes with lower costs.
Comparison with other brokers
Trade Republic is known for its low costs. The company charges no custody fees and the costs for trading ETFs are very low. Compared to traditional brokers, who often charge high fees and commissions, Trade Republic has a clear advantage here. However, other discount brokers such as Scalable Capital can offer similarly favourable conditions. (Trade Republic vs Scalable Capital)
Trade Republic offers a user-friendly app that allows beginners to invest simply and easily. The provider has a large selection of the best ETFs, shares and derivatives. However, the range of funds and bonds may be limited compared to other brokers. Beginners will certainly find what they are looking for here, but if you are interested in particularly exotic securities, you should consider another broker.
Trade Republic is a broker regulated in Germany and a member of the Deposit Protection Fund of the Association of German Banks:
- Your deposits are therefore legally protected up to an amount of 100,000 euros
- This is a standard that all the brokers mentioned here fulfil
- You don’t have to worry about security, as this is a reputable provider
Conclusion: Our Trade Republic savings plan recommendation achieves high returns
Trade Republic is an interesting option for many newcomers to the stock market: low fees, free savings plans on ETFs, user-friendly and intuitive design and a large selection help to make a successful start to investing.
Which ETF you choose depends on how much knowledge you have, what your investment goals are and whether you have already built up a broadly diversified portfolio. So-called world ETFs, which contain numerous positions from different countries and sectors, are particularly interesting for beginners.
A concrete example of this is the iShares MSCI World, which is an attractive option for many beginners. If sustainability is important to you, ETFs that comply with ESG guidelines are an option. You should only consider thematic ETFs if you have a broadly diversified portfolio and some experience, as you have to reckon with higher risks here.
Good luck with your search! If you would like more information on choosing the right ETF, you may be interested in our article ‘ETF selection’!
FAQ – Frequently asked questions
