ETF Savings Plans Explained: How ETF Saving Plans Really Work

“I should have started much earlier.”

That is something I hear all the time when people talk about investing. And honestly, who has not thought that at some point? Looking back, it always feels like there was a better moment to start.

Many people believe that investing through ETF savings plans requires deep financial knowledge and lots of time. In reality, it is far simpler. Step by step, calm, and even possible with a small budget.

In this article, we explain how ETF savings plans really work, which costs you should be aware of, and how to choose suitable ETFs. You will also see a practical example using the Smart All World ETP as a possible starting point.

What is an ETF savings plan?

An ETF savings plan works a bit like an automatic system. You decide how much money you want to invest regularly, for example every month, and this amount is automatically invested into one or more ETFs.

Compared to one-off investments, where you buy an ETF or a share at a single point in time, savings plans spread your investments over time. This helps reduce timing risk and allows you to benefit from the average price effect, also known as the cost averaging principle.

For beginners and for steady wealth building, this approach is ideal. You do not need to analyse markets constantly. You start gradually, even with small amounts, and build consistency over time. If you want to begin, you can also explore ETF investing directly through SmartPurse.

What are ETF savings plans suitable for?

ETF savings plans are flexible and work particularly well for long-term financial goals.

Many people use them for retirement planning, investing regularly to build a solid foundation for later life. Others focus on long-term wealth building, gradually growing capital without pressure. Some aim for greater financial freedom over time by investing consistently and patiently.

Because the process is automatic, ETF savings plans are especially helpful for people who want structure without constant decision-making.

Setting up your ETF savings plan

Once you have chosen your approach, the setup itself is straightforward.

You decide whether you want to manage everything yourself or use a managed solution. If you manage it yourself, start with broad indices such as the MSCI World.

Next, choose how often you want to invest. Monthly is the most common and practical option.

Then define a regular amount. Even small sums are enough. What matters most is consistency.

Finally, set up the automatic investment. From there, the plan runs on its own.

It is a good idea to schedule regular reviews, for example every three or six months, especially if you manage your portfolio yourself. This helps you stay aligned with your goals.

Behind the scenes, you buy ETF units regularly regardless of market movements. Sometimes you buy at higher prices, sometimes at lower ones. Over time, this creates an average purchase price.

For inspiration or for a globally diversified, future-focused solution, you can also look at the Smart All World ETP, which combines multiple asset classes in one product.

Why ETF savings plans are so popular

ETF savings plans feel a bit like a savings account that actually invests for you.

They remove emotion from investing. You invest regularly without reacting to headlines or market noise.

When markets fall, you automatically buy more units. When markets rise, you buy fewer. Over time, this supports disciplined investing.

They also save time. Once set up, you do not need to monitor markets daily. The plan works quietly in the background.

Even small monthly amounts can grow significantly over many years thanks to compounding.

Which ETFs work well for savings plans?

For beginners, broadly diversified ETFs are usually the best choice. They cover many countries and sectors and reduce concentration risk.

Well-known global indices include the MSCI World, which tracks around 1,300 companies across developed markets, and the FTSE All World, which includes over 3,600 companies worldwide.

Other commonly used indices include the MSCI ACWI, which combines developed and emerging markets, the S&P 500, focused on large US companies, and the MSCI Emerging Markets index.

When choosing ETFs, it helps to follow clear criteria such as diversification, costs, and transparency. Tools and checklists, such as those available in the Money School, can support your decision.

How much should you invest each month?

Start small. Even 50 to 100 Swiss francs per month can make a difference over time.

Consistency matters far more than the starting amount. As your income or confidence grows, you can increase your monthly contribution.

ETF savings plans are flexible. You can adjust amounts, pause contributions, or expand your portfolio with additional ETFs later.

What does an ETF savings plan cost?

Costs depend on how you invest.

With robo advisors, you typically pay a management fee in addition to the ETF product costs. In Switzerland, management fees often range between 0.25 and 0.7 percent per year, plus ETF costs.

If you build your savings plan yourself, cost structures are different. Some banks and brokers offer automated savings plans with low transaction costs and no custody fees.

For example, with Saxo AutoInvest, there are no custody fees and no transaction fees for savings plans. Because you manage the portfolio yourself, there is also no management fee.

Overall, a well-structured ETF savings plan should usually cost well below one percent per year.

Risks you should be aware of

ETF savings plans are not risk-free.

Markets fluctuate, and short-term losses are possible. A savings plan does not guarantee profits at a specific point in time.

High costs can reduce returns over the long term, so cost awareness is important.

Poor diversification increases risk. Emotional reactions, such as panic selling during market downturns, can seriously harm long-term results.

There are also differences in ETF structures, such as replication methods and fund domicile, which can affect risk and taxation.

ETF savings plans reduce many risks through diversification and regular investing, but they do not eliminate them entirely. Patience, diversification, and cost discipline remain essential.

FAQ

How much money do I need to start?
Small amounts are enough. Many providers allow you to start with very low monthly contributions.

How often should I invest?
Monthly investing is common and practical, but frequency is flexible.

What happens if markets fall?
Market fluctuations are normal. With a long time horizon of ten years or more, risk is significantly reduced.

Which product works well for beginners?
Broad indices such as the MSCI World or national indices like the Swiss Performance Index are common starting points. For a simple, all-in-one approach focused on the future, the Smart All World ETP can also be worth exploring.

Conclusion: ETF savings plans change the way people invest

An ETF savings plan makes long-term investing simple, automatic, and efficient.

You do not need expert knowledge. You need a clear goal, regular investing, and patience.

Start today, try it out, and watch how your wealth grows step by step. With a thoughtful ETF selection, cost awareness, and consistency, you have everything you need to begin.

If you want a simple starting point, the Smart All World ETP offers global diversification and a future-focused approach without unnecessary complexity.