{"id":343721,"date":"2024-05-21T19:49:39","date_gmt":"2024-05-21T19:49:39","guid":{"rendered":"https:\/\/northern.finance\/bonus\/investing-in-etfs-building-your-wealth-by-2026\/"},"modified":"2026-09-20T20:01:47","modified_gmt":"2026-09-20T20:01:47","slug":"investing-in-etfs-2","status":"publish","type":"post","link":"https:\/\/northern.finance\/en\/etf\/investing-in-etfs-2\/","title":{"rendered":"Investing in ETFs \u2013 Building your wealth by 2026"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Would you like to benefit from attractive investment opportunities, provide for your family financially, save for retirement, or do you have another long-term financial goal? ETFs offer a way to achieve such a goal. In this article, we\u2019ll take a closer look at how you can invest money and build up your wealth using an ETF, how investing works, and what advantages and disadvantages you should be aware of.<\/strong><\/p>\n\n\n\n<div>\n<div class=\"wp-block-group nf-info-boxen\">\n<div class=\"wp-block-group__inner-container\">\n<p class=\"nf-boxen-p-gut-zu-wissen\"><strong>In brief:<\/strong><\/p>\n<ul class=\"infobox-ul\">\n<li class=\"infobox-li\">You should definitely bear these 9 points in mind to avoid typical beginner\u2019s mistakes when investing <\/li>\n<li class=\"infobox-li\">We\u2019ll show you why ETFs are an attractive investment and whether or not they\u2019re worth it for beginners<\/li>\n<li class=\"infobox-li\">Before making a potential investment, you should consider these potential risks associated with this asset class<\/li>\n<\/ul>\n<\/div><\/div><\/div>\n\n\n\n\n\n\n<h2 class=\"wp-block-heading\">What is an ETF?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Before we look at the details you should bear in mind if you want to invest in ETFs, let\u2019s take a closer look at how this asset class works and the potential opportunities and risks it presents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If we write out the term \u2018ETF\u2019, we get \u2018<strong>Exchange Traded Fund<\/strong>\u2019, which already gives us an indication of exactly what it is. When many investors pool their money into a single investment pot, this is referred to as a fund. The fund collects the money and then invests it in a predetermined investment. <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>ETFs can therefore invest in various asset classes, such as bonds, commodities or shares<\/li>\n\n\n\n<li>Investing in shares via ETFs is particularly popular, as this can help to reduce certain risks that are higher when investing in individual shares<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">This raises the question of exactly how the shares in which an ETF invests are selected. It is important to understand the difference between active and passive funds. An <strong>active fund<\/strong> is managed by a fund manager. The fund manager aims to achieve an above-average return and thus outperform the market\u2019s average return.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To this end, he selects appropriate assets which, in his view, can help to generate particularly high returns. In reality, however, it is very rare for fund managers to be able to achieve excess returns over extended periods. Active funds also come with higher fees, as the management team has to be paid.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">ETFs are a type of <strong>passive fund<\/strong>. They do not require a fund manager. Instead, these securities track so-called indices. One example is the S&amp;P 500, which comprises the 500 largest US companies. If an investor decides to invest in an ETF tracking the S&amp;P 500, they can invest their money in the 500 largest companies in the US with just a single security!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Advantages of ETFs<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s first take a look at the reasons why investing in ETFs might be worthwhile for you. One of the biggest advantages of ETFs is the <strong>attractive potential for returns<\/strong>. If you want to <a href=\"https:\/\/northern.finance\/en\/learn-how-to-invest\/growing-your-money\/\" data-type=\"post\" data-id=\"254737\">grow your money<\/a>, this could be the right choice for you: with this asset class, you can achieve an average annual return of 8 per cent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Historically speaking, shares have been amongst the highest-yielding investments. The high <a href=\"https:\/\/northern.finance\/en\/etf\/etf-returns\/\" data-type=\"post\" data-id=\"252069\">returns on ETFs<\/a> also have implications in terms of <a href=\"https:\/\/www.destatis.de\/EN\/Themes\/Economy\/Prices\/Consumer-Price-Index\/_node.html\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/www.destatis.de\/EN\/Themes\/Economy\/Prices\/Consumer-Price-Index\/_node.html\" rel=\"noreferrer noopener\"><strong>inflation<\/strong><\/a>. With conventional investments, investors can scarcely achieve any returns. <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Inflation refers to a rising price level<\/li>\n\n\n\n<li>Money that does not generate a sufficient return can thus become increasingly devalued<\/li>\n\n\n\n<li>Inflation can only be offset by investments that generate high returns<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">ETFs combine the advantage of high returns with greater security. But where does this greater security come from? When an investor puts their entire portfolio into a single share or just a few shares, this entails significant risks.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"2560\" height=\"1171\" src=\"https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-scaled.png\" alt=\"\" class=\"wp-image-343854\" srcset=\"https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-scaled.png 2560w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-300x137.png 300w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-768x351.png 768w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-1024x468.png 1024w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-1536x702.png 1536w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-1-13-1-2048x936.png 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"wp-block-paragraph\">If a company\u2019s performance is worse than expected, or if it even has to file for insolvency, this may result in a total loss of the investment or significant losses. This <strong>risk <\/strong>can be significantly reduced through <strong>diversification<\/strong>. This point should play a crucial role in your <a href=\"https:\/\/northern.finance\/etf\/etf-suche\/\" data-type=\"post\" data-id=\"256921\">search for ETFs<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The idea behind this is easy to understand:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If, instead, an investor invests in a large number of different shares, losses incurred by certain companies can be offset by profits made by other companies<\/li>\n\n\n\n<li>The risks are spread across a large number of companies, which increases the security of the portfolio<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, security is enhanced by the classification of ETFs as <strong>special investment funds<\/strong>. This means that banks and brokers are required to keep investors\u2019 money separate from their own assets. In the event of insolvency, investors\u2019 money is therefore protected. <\/p>\n\n\n\n<div>\n<div class=\"wp-block-group nf-info-boxen-blau\"> \n<div class=\"wp-block-group__inner-container\"> <p class=\"nf-boxen-p-lesetipp\"><strong>Good to know: <\/strong><\/p> \n<p class=\"nf-boxen-p\">Diversification isn\u2019t just about the number of companies. The same problem can arise if you invest solely in a particular sector and difficulties arise there. Investing exclusively in a single country can also be risky. Country-specific problems, such as environmental or economic crises, may arise, which could then affect all shares from that country.<\/p> \n<\/div><\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">We have already established that ETFs are a type of passive fund. As no fund manager is required, investors pay lower fees compared to active funds. These securities are therefore a comparatively <strong>low-cost asset class<\/strong>. Comparing <a href=\"https:\/\/northern.finance\/erfahrungsbericht\/etf-sparplan-vergleich\/\" data-type=\"post\" data-id=\"5400\">ETF savings plans<\/a> can help you find the securities with the most favourable terms.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How risky are ETFs?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors should also consider the potential risks before making any investment. Price fluctuations are one example. All securities traded on the stock exchange are characterised by <strong>fluctuating prices<\/strong>. These fluctuations can be particularly severe, especially during economic crises. One way to mitigate this risk is to adopt a long-term investment horizon.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another risk lies in so-called <strong>thematic ETFs<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>These are ETFs that specialise in specific sectors<\/li>\n\n\n\n<li>They usually invest in a single sector and are therefore significantly less diversified<\/li>\n\n\n\n<li>Furthermore, due to this specialisation, they typically include far fewer companies, which makes the investment riskier<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">There may also be a <strong>currency risk<\/strong>. If you buy an ETF that is traded in a currency other than your local currency, you may be subject to unfavourable exchange rates when buying or selling. This can have a negative impact on your future returns. You can also mitigate this risk by adopting a long-term investment horizon. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Potential risks lie in the method of <a href=\"https:\/\/en.wikipedia.org\/wiki\/DNA_replication\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/de.wikipedia.org\/wiki\/Replikation\" rel=\"noreferrer noopener\"><strong>replication<\/strong><\/a>. Replication refers to how an ETF tracks its index. A basic distinction is made between physical and synthetic replication. Physical replication means that the securities included in the index are actually purchased. <\/p>\n\n\n\n<div>\n<div class=\"wp-block-group nf-info-boxen-blau\"> \n<div class=\"wp-block-group__inner-container\"> <p class=\"nf-boxen-p-lesetipp\"><strong>Good to know: <\/strong><\/p> \n<p class=\"nf-boxen-p\">Synthetic replication is slightly more complicated and works like a kind of swap transaction with a counterparty. This can give rise to counterparty risk if the counterparty is unable to fulfil its obligations.<\/p> \n<\/div><\/div><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Investing in ETFs \u2013 Bear these investment basics in mind<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Below, we\u2019ll look at a few tips that can help you get off to a successful start with investing. This will enable you to mitigate potential risks and avoid mistakes.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Set a target and develop a strategy<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">This step may sound trivial at first glance, but it is essential. Only when you know exactly what your goal is can you work out how much money you\u2019ll need to achieve it. <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Do you want to provide for your family financially?<\/li>\n\n\n\n<li>Do you want to save for your pension so that you can enjoy a carefree life in your later years?<\/li>\n\n\n\n<li>Or do you want to invest money that you don\u2019t currently need wisely in order to increase your returns?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These questions are a key part of <strong>developing your own strategy<\/strong>. Once you know your goal, you can take this into account when choosing your investment horizon and selecting your investments. You\u2019ll also need these answers to work out how <strong>much money you need to invest<\/strong> in order to achieve your goal within your desired timeframe.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By the way, you should plan not only how you\u2019ll start investing, but also when you\u2019ll stop. Do you want to withdraw your entire investment in ETFs in <strong>one go in the future<\/strong>, or would you prefer to do so gradually?<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. How high is my risk tolerance?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Investors have different personalities, which influence their individual investment strategies. Someone with a high risk appetite is more likely to opt for high-yield, high-risk investments. Other people are risk-averse and find it harder to cope with significant price fluctuations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">You should be aware of your own risk tolerance so that you can develop your strategy. This will enable you to decide what proportion of your portfolio to allocate to income-generating investments, such as ETFs. Find the right balance between your <strong>safety and return components<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Age <\/strong>is another factor to consider here: younger investors can \u2018afford\u2019 to make mistakes and lose money whilst learning. Older investors, on the other hand, should have a greater safety net.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Invest now or wait a little longer?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most important tips when it comes to investing is to start early. This allows you to make the most of the <strong>power of compound interest<\/strong>. The power of compound interest refers to the fact that, over time, an investment can generate returns at an increasingly faster rate and grow more rapidly. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This results in exponential growth, as the returns you earn are reinvested and these, in turn, work towards building your wealth. The earlier you start investing, the more you can benefit from this effect. So the initial question is easy to answer: <strong>now is the right time to invest!<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Pay off debts<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Before you start investing, you should pay off any existing debts. These often come with high interest rates, so it would be advisable to pay them off first. This does not apply, for example, to debts such as a mortgage. Such payments are spread over long periods. In this case, you would lose too much time if you waited until the debts were paid off.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Get your finances in order and maximise potential savings<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Whilst you\u2019re already looking into your finances, you could use this opportunity to review your spending. You might find some <strong>expenses you could cut out<\/strong>, such as subscriptions you no longer need. You could use this money to increase the amount you save into your ETF and, in this way, grow your wealth more quickly. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">6. Build up some savings<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Unfortunately, <strong>unforeseen expenses<\/strong> can crop up from time to time. Examples might include a broken washing machine or an unexpected car repair. In such cases, a nest egg \u2013 which you should set aside in advance \u2013 can be a great help. This should generally amount to two to three months\u2019 salary and be held in an investment class that is readily accessible.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A emergency fund can also help you get through any periods of unemployment<\/li>\n\n\n\n<li>Before you <a href=\"https:\/\/northern.finance\/en\/etf\/investing-in-etfs\/\" data-type=\"post\" data-id=\"261170\">invest in an ETF<\/a>, you should build up some form of financial safety net<\/li>\n\n\n\n<li>This way, you can avoid having to sell your ETF units during difficult periods<\/li>\n\n\n\n<li>Otherwise, you might be forced to sell at unfavourable prices and incur losses<\/li>\n\n\n\n<li>That is why setting aside a financial safety net is highly recommended<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">7. Length of the investment horizon<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">ETFs are a long-term investment. A <strong>long investment<\/strong> horizon can help mitigate certain risks. Currency risks or price risks can be offset. Furthermore, you can make better use of the power of compound interest and increase your returns if you plan your investment for the long term. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you only want to invest your money for short periods, ETFs are not suitable. In this case, you should opt for a fixed-term deposit account, for example, if you only want to invest your money for a year. Investing in ETFs would be too risky in this situation, as you might be forced to sell at unfavourable prices and incur losses. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Furthermore, you should only invest money in ETFs that you definitely won\u2019t need over the next few years. If you stick to a long-term investment horizon and broad diversification, ETFs may well be the <a href=\"https:\/\/northern.finance\/en\/learn-how-to-invest\/best-low-risk-investment\/\" data-type=\"post\" data-id=\"247464\">best risk-free investment<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">8. Only invest in asset classes that you understand<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Are <a href=\"https:\/\/northern.finance\/en\/etf\/etfs-for-beginners\/\" data-type=\"post\" data-id=\"245361\">ETFs suitable for beginners<\/a>? That\u2019s one of the key advantages of this type of investment. They\u2019re easy to understand and don\u2019t require much effort. Once you\u2019ve taken the time to learn about them properly, you can invest your money or set up a savings plan that runs automatically.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, not every investment is suitable for beginners. As a general rule, you should only invest in asset classes that you understand. Only once you have researched them thoroughly can you prepare for <strong>potential risks<\/strong> and avoid common pitfalls. The better you understand the investment, the more successful your start will be!<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"2560\" height=\"1185\" src=\"https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-scaled.png\" alt=\"\" class=\"wp-image-343860\" srcset=\"https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-scaled.png 2560w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-300x139.png 300w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-767x355.png 767w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-1024x474.png 1024w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-1536x711.png 1536w, https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/Grafik-2-14-1-2048x948.png 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\">9. Compare costs<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Although ETFs are a low-cost asset class, you should still compare the associated costs. These securities have what is known as the <strong>TER<\/strong>, or Total Expense Ratio. Fees should be as low as possible so that your returns are not eroded. You should also pay attention to the terms and conditions set by your broker or bank. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, <strong>securities account management<\/strong> should be free of charge. If your current bank does not offer free securities account management, it might well be worth switching. Switching is particularly worthwhile if you are planning a long-term investment horizon.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion: Investing in an ETF and building wealth<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">ETFs are funds that track an index. They aim to replicate this index as closely as possible. These securities invest, for example, in shares, commodities or bonds, and offer a whole range of attractive benefits.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These include the potential for high returns, which make it possible to combat inflation. Furthermore, the security offered by this asset class is comparatively high, thanks to the scope for diversification and the structure of the sub-funds. Due to their passive nature, ETFs are also a cost-effective asset class.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Prospective investors should also consider the <strong>risks<\/strong> involved. As these securities are traded on the stock exchange, price fluctuations are to be expected. Furthermore, counterparty risk may arise in connection with synthetic replication, or currency risk may be involved.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We\u2019ve also outlined a few basics to help you avoid <strong>typical beginner\u2019s mistakes<\/strong> when it comes to investing. For example, be clear about exactly what your goals are so that you can develop a suitable strategy. Work out how risk-averse you are, so that your investment suits you and your priorities. Build up a nest egg before you start investing to give yourself some financial security. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Good luck with building your wealth! You might be interested in topics such as \u201c<a href=\"https:\/\/northern.finance\/en\/review\/scalable-capital-vs-trade-republic\/\" data-type=\"post\" data-id=\"242400\">Scalable Capital vs Trade Republic<\/a>\u201d, \u201c<a href=\"https:\/\/northern.finance\/erfahrungsbericht\/etf-sparplan-vergleich\/\" data-type=\"post\" data-id=\"5400\">ETF savings plan comparison<\/a>\u201d or \u201c<a href=\"https:\/\/northern.finance\/en\/etf\/the-10-best-dividend\/\" data-type=\"post\" data-id=\"5503\">dividend ETFs<\/a>\u201d. <a href=\"https:\/\/northern.finance\/en\/\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/northern.finance\/en\/\" rel=\"noreferrer noopener\">Find out more here<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FAQ &#8211; Frequently asked questions<\/h3>\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-4a9c7453 uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-true uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height     \" data-faqtoggle=\"true\" role=\"tablist\"><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-b35b5db5 \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>How do ETFs work?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>This is a fund. Many investors contribute money to such a fund collectively. This money is used to invest in a specific asset class, such as bonds, commodities or shares. ETFs are index-tracking and aim to replicate the relevant index as closely as possible. They are therefore passive funds. A fund manager is not required, as the composition is already fixed. This type of security offers advantages such as attractive potential returns, low fees and a high degree of diversification.<\/p><\/div><\/div><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-8886944b \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>What are the risks associated with ETFs?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>These funds are traded on the stock exchange, which means investors must expect price fluctuations. Furthermore, currency risks may arise when funds denominated in other currencies are purchased. Synthetic replication may give rise to counterparty risk. In addition, thematic ETFs are risky as they are not sufficiently diversified and therefore entail higher risks.<\/p><\/div><\/div><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-cf9d9ae3 \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>Can beginners invest in an ETF?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>ETFs are suitable for beginners. They are easy to understand and do not require much time or effort. Once an investor has familiarised themselves with them in detail, they can invest their money. Everything else will then be managed automatically. It is also possible to invest smaller sums. This is why ETFs are an attractive choice for beginners too.<\/p><\/div><\/div><div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-7f79fb87 \" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\">\t\t\t<span class=\"uagb-icon uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t<span class=\"uagb-icon-active uagb-faq-icon-wrap\">\n\t\t\t\t\t\t\t\t<svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox= \"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg>\n\t\t\t\t\t\t\t<\/span>\n\t\t\t<span class=\"uagb-question\"><strong><strong>What do I need to bear in mind if I want to invest in an ETF?<\/strong><\/strong><\/span><\/div><div class=\"uagb-faq-content\"><p>Anyone wishing to start investing should first familiarise themselves with the key basics. These include, for example, setting a goal, assessing your own risk tolerance, paying off debts or building up a nest egg. Furthermore, you should bear in mind that ETFs are a long-term asset class.<\/p><\/div><\/div><\/div>\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Would you like to benefit from attractive investment opportunities, provide for your family financially, save for retirement, or do you have another long-term financial goal? ETFs offer a way to achieve such a goal. In this article, we\u2019ll take a closer look at how you can invest money and build up your wealth using an [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":343848,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_uag_custom_page_level_css":"","footnotes":""},"categories":[1031],"tags":[],"class_list":["post-343721","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-etf"],"acf":[],"uagb_featured_image_src":{"full":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024.png",1920,1080,false],"thumbnail":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024-150x150.png",150,150,true],"medium":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024-300x169.png",300,169,true],"medium_large":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024-768x432.png",768,432,true],"large":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024-1024x576.png",1024,576,true],"1536x1536":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024-1536x864.png",1536,864,true],"2048x2048":["https:\/\/northern.finance\/wp-content\/uploads\/2024\/05\/EN-Geld-anlegen-in-ETF_-Vermogensaufbau-im-Jahr-2024.png",1920,1080,false]},"uagb_author_info":{"display_name":"Aleks Bleck","author_link":"https:\/\/northern.finance\/en\/author\/phil-nf\/"},"uagb_comment_info":0,"uagb_excerpt":"Would you like to benefit from attractive investment opportunities, provide for your family financially, save for retirement, or do you have another long-term financial goal? ETFs offer a way to achieve such a goal. In this article, we\u2019ll take a closer look at how you can invest money and build up your wealth using an&hellip;","_links":{"self":[{"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/posts\/343721","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/comments?post=343721"}],"version-history":[{"count":6,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/posts\/343721\/revisions"}],"predecessor-version":[{"id":343931,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/posts\/343721\/revisions\/343931"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/media\/343848"}],"wp:attachment":[{"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/media?parent=343721"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/categories?post=343721"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/northern.finance\/en\/wp-json\/wp\/v2\/tags?post=343721"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}