The ultimate guide for ETF enthusiasts

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Use our ultimate ETF fan checklist to easily check if you're on the right track in 8 simple steps. It covers selecting the right ETF and utilizing key figures for your savings plan.

The ultimate guide for ETF enthusiasts
  • Level: For beginners
  • Reading duration: 5 minutes
What to expect from this article

Is my portfolio adequately diversified?

The stock markets offer only one opportunity for a "free lunch", which is diversification. Therefore, it is important to determine if your portfolio is diversified enough. Have you invested in various economies and sectors globally, or are there concentrated risks in your portfolio?
One of the simplest approaches is to create a globally diversified ETF portfolio using just one ETF

Is my ETF priced at a reasonable level?

It's crucial to consider the costs associated with ETFs as well. There is a vast array of around 2,000 ETF products to choose from. The competition among providers guarantees that the costs of ETFs keep decreasing, which is beneficial for us investors.
It might be worthwhile to periodically evaluate whether your chosen ETF is still the most affordable option or if there is a cheaper fund that tracks the same index. Our ETF search tool allows you to effortlessly view the relevant ETFs arranged by their Total Expense Ratio (TER).

Is the size of my ETF adequate?

The significance of the fund's volume in ETFs is clear: the bigger an ETF is, the lower the chances of the fund company shutting it down. Therefore, we recommend ensuring that your chosen ETF has a minimum weight of 100 million euros. You can view the fund's size through our ETF search and, naturally, filter your options based on it.

Is my savings rate correct?

The savings plan belongs to the ETF like the Eiffel Tower belongs to Paris – so it's clear that we also take a closer look at the savings plans in our checklist.
In times of inflation, the question of the level of your savings rates is particularly important. In order to maintain real purchasing power, it makes sense to adjust the savings rates to the current inflation rate. 

Are my savings plan costs low enough?

Also check regularly whether ongoing promotional ETFs can still be saved for free in your savings plans. If not, it may be worth it for you to change your ETF savings plan or even switch to an online broker that is cheaper overall. You can easily compare the offers from different online brokers with us.

Did I put back the money I received as distributions?

It is important to ensure that you promptly and efficiently reinvest any money that you have received in your clearing account through ETF distributions. This is the most effective way to take advantage of the compound interest effect. All you need to do is adjust your monthly savings rate by the amount that has accumulated in your account.
The total sum will then be automatically reinvested, without any charges to you. If your savings plans are connected to an external checking account, you will need to transfer the money from your clearing account to your checking account before making any withdrawals.

Have I set up my exemption request?

Of course, the topic of ETFs and taxes cannot be missing from our checklist . In particular, make sure that you have set up your exemption order for the savings allowance - as this will save you taxes on part or even all of your capital income.

Is my risk profile correct?

One last point for advanced users: Pay attention to your own risk profile ! Did your originally determined equity quota perform significantly better compared to your low-risk portfolio component or vice versa? Then it's time to rebalance your own ETF portfolio. We'll show you how portfolio rebalancing works.
justETF tip: Want to find out more about rebalancing? Here we explain what portfolio rebalancing is.

The conclusion

If you pay attention to these 8 points, nothing will stand in the way of successfully investing in ETFs. Remember to check the points regularly to invest your money successfully in the long term.
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