How to set up your ETF Savings Plan

Investing regularly over the long term is a great way of building up wealth. In another article, we explained the potential that lies behind investing regular sums of money and sticking to a monthly schedule. The great thing about this strategy is that you don’t have to invest a lot of money – as long as you do it regularly.

Today, we’ll explain how you can invest regularly in ETFs with BUX Zero. Why ETFs? With Exchange Traded Funds you invest in baskets with dozens or hundreds of kinds of shares – a great way to diversify your portfolio. Head over to our ETF Knowledge Centre to learn more about ETFs.

How does recurring ETF investing work?

Instead of trying to time the market and guess the perfect moment to invest (which almost never works), you make a regular investment at the same time each week or month. When you do this, timing doesn’t matter too much. This is also called the dollar cost averaging effect. 

For example, if an ETF is lower one month, you’ll end up buying more shares for your money. And if it’s higher in the next month, you’ll get slightly fewer shares. Over time, it tends to average out. You can be flexible too – maybe you skip one month and invest a larger amount the following month. The key ist to make it a regular habit.

Even small sums will get you ahead

ETFs are particularly good if you want to get exposure to a broader range of stocks with a small amount of capital. This works best with regular investments. For example, you could start with €25 or €50 every month. Some invest quarterly but with bigger sums.

Let’s do some sums. Imagine you invest €50 every month with a return of 5%. After ten years, you will have deposited €6,000. On top of that, you’ll get a return of €1924.

In the long term, compound interest will help you if you reinvest any dividends you get along the way. Some ETFs automatically reinvest your dividend – these are called accumulation ETFs. On BUX Zero, for example, the iShares Germany DAX 30 Index ETF is an accumulating ETF.

How do I regularly invest in ETFs with BUX Zero?

It’s quite easy: 

  • Go to your portfolio page in the app where you will find the section “Your plans”.
  • Create your personal Savings Plan: Add an ETF and enter the amount to adjust your budget.
  • We will automatically execute your plan once a month. The fee will be 1€ no matter how many ETFs you have in your plan.  

You can now find your Savings Plan on your portfolio page in the BUX Zero app, and you can always adjust it when needed. 

Not yet a BUX Zero user? Download the app, top up your account and get a free share.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.