01/29/2026

13 min read

How to invest in ETFs

More and more investors are turning to ETFs. That’s no surprise as many of these exchange-traded funds follow well-known indices and offer a simple way to get started in the stock market. Anyone looking to build wealth over the long term will find ETFs a flexible option with manageable risk.

In this article, you'll learn how beginners can invest in ETFs, what to consider when choosing them and which strategies might suit your portfolio. Whether it's a savings plan or a one-off investment: we'll guide you step by step on how to invest in ETFs the right way.

Advantages of ETFs: ETFs combine broad diversification, low costs and easy accessibility, making them especially popular with long-term investors and beginners.
Step-by-step ETF investing: Choose a platform, open a securities account, define your investment goal and set up a savings plan to buy stocks regularly.
Choosing the right strategy for your goal: Decide whether you want to invest regularly or focus on specific themes, as different goals call for different strategies.
Integrating ETF investments into your portfolio wisely: Focus on broadly diversified ETFs as the foundation of your portfolio and add specific sectors, regions or other asset classes if needed.

What are the advantages of investing in ETFs?

Investing in ETFs is a sensible first step for many investors looking to build wealth over the long term. ETFs combine broad diversification with low costs and simple handling. They're especially suitable for beginners, as the structure is usually easy to understand and the barriers to entry are low. Whether it's a savings plan or a one-off investment: exchange-traded funds make it possible to participate in the performance of financial markets even with small amounts.

Advantages of ETFs at a glance:

Broad diversification: ETFs invest in many different stocks or other securities, reducing the risk that the performance of individual companies will strongly affect the entire portfolio.
Long-term performance: Those who regularly buy ETFs can benefit over the years from the average performance of entire indices such as the MSCI World.
Easy to manage via online platforms: Digital providers like Bitpanda make it possible to invest in ETFs without complex processes or high barriers to entry.
Transparent structure: The composition of an ETF is publicly accessible, allowing investors to track which companies they're investing in at any time.
Low ongoing costs: Since ETFs are mostly passively managed, fees are often significantly lower than those of actively managed funds.
Flexible trading on the stock exchange: ETFs can, like stocks, be bought or sold directly on the stock market, increasing liquidity and control within the portfolio.

Step by step: how to invest in ETFs the right way

The best way to invest in ETFs is with a clear plan. A structured approach helps you find the right products, keep an eye on costs and build your portfolio effectively. The following steps show how beginners can invest in ETFs, from the first click to setting up a savings plan.

The key steps at a glance:

Choose a platform or broker
Define your investment goal
Select suitable ETFs
Compare and understand the costs
Buy your first stocks and start investing

Choose a platform or broker

To invest in ETFs, you'll need a securities account with a provider that supports ETF trading. This can be an online broker, an investment platform or a bank. All purchases, sales and savings plans are managed via this account. Your choice of platform will affect important factors like fees, ease of use, available ETFs and features such as automated savings plans.

When comparing different platforms, it's worth checking a few things:

Which ETFs and indices can I trade?
What are the fees?
Is there a mobile app or user-friendly web interface?
How does account opening work and how long does verification take?
Can I adjust my savings rate flexibly?

Bitpanda as a platform

Invest in real ETFs directly on the Bitpanda platform * – without needing a traditional securities account. You can start with small amounts and manage your investments flexibly, all in one place.

Account opening is fully digital and takes just a few minutes.
Set up a savings plan* from a low monthly amount and automate your investments.
Choose from a range of ETFs that track well-known indices like the MSCI World.
Fees and pricing are transparent and you’ll see all relevant costs before you invest.
Fund your account in euros, for example via SEPA or instant transfer.

Trade stocks and ETFs - €1 fee per trade with no custody fees.*

Get started

Define your investment goal

Before investing in ETFs, it's worth looking at your personal investment goal. Depending on whether you're aiming for long-term wealth building, regular income or a balanced portfolio, different ETFs may be suitable. Your choice of index, the weighting of sectors or the decision between distributing or accumulating funds will also depend on this.

Common goals for ETF investments include:

Long-term growth: ETFs based on large stock indices such as the MSCI World pool companies from various countries and sectors, helping smooth out market fluctuations over time and enabling long-term wealth accumulation.
Regular income: Distributing ETFs pass on generated income such as dividends or interest directly to investors, which can provide an extra income stream depending on market conditions.
Broad diversification: A diversified ETF portfolio spreads risk across different regions, sectors or asset classes, offering better protection against market volatility.
Capital preservation with limited risk: If your aim is to preserve capital, ETFs with low volatility and a focus on defensive companies can help maintain value, for example, for medium-term financial goals or safeguarding existing wealth.

Choose the right ETFs

Not every ETF suits every investment goal. Differences in index, costs or risk structure can significantly affect your portfolio’s performance. By understanding the characteristics of individual ETFs in advance, you can invest more purposefully and avoid common beginner mistakes, such as high fees or too little diversification.

These criteria can help you compare:

Index: The underlying index determines which companies are included in the ETF. For example, the MSCI World features large firms from developed countries, while the S&P 500 includes the biggest US companies.
Performance: Historical performance shows how the ETF has behaved in the past/ This is useful as guidance, but not a guarantee for the future.
Costs: The total expense ratio (TER) and possible spreads count as ongoing costs and can noticeably reduce returns over time.
Sector or theme: Thematic ETFs focus on specific sectors such as tech, healthcare or renewable energy, offering potential for higher returns but also increased risk.
Risk category and volatility: These indicate how much the ETF's value may fluctuate and help ensure the product fits your personal risk tolerance.

Keep an eye on costs

When investing in ETFs, various types of costs affect how much of your money actually goes into building wealth. Especially for long-term savings plans, even small fees can reduce your potential returns. It's worth understanding and comparing key cost factors before buying:

Management fees: The total expense ratio (TER) shows what percentage of fund assets is deducted annually for management and ongoing costs
Bid-ask spreads: The difference between the buy and sell price in stock market trading varies depending on the ETF, liquidity and market conditions
Transaction fees: Depending on the provider, buying or selling ETFs can incur additional charges, such as order or exchange fees

Good to know:

With Bitpanda, you invest in real ETFs. A Bitpanda savings plan lets you automate your investments – ideal for regular contributions. For one-time purchases or sales, a flat fee of € 1 per trade applies.*

Buy your first ETF

After choosing a platform, setting your goal and comparing suitable ETFs, the next step is your first purchase. Investing in ETFs is straightforward: once your account is set up and funded, you’re ready to go. Whether it’s a one-off investment, a savings plan or a combination of both, the first purchase sets the foundation for long-term returns.

How to buy your first ETF:

Fund your account: Before buying, money needs to be deposited to your account (depending on the provider, via bank transfer or instant payment).
Select an ETF: Choose an ETF that suits your investment goal, for example, a global index like the MSCI World.
Set up a one-off investment or savings plan: Decide whether you want to invest a larger amount at once, contribute regularly, or combine both.
Choose distributing or accumulating: Distributing ETFs pay out income directly while accumulating ETFs reinvest it automatically.
Buy stocks and invest: Enter your amount, confirm the purchase and then track the performance in your portfolio.

Which investment strategies are suitable for ETFs?

When getting started, many wonder: how should I begin investing in ETFs, and what should I consider? A clear plan and strategy will help you stick to your investment goal. Common strategies include buy and hold, the core-satellite approach, regular investing via a savings plan and targeted purchases of thematic or sector ETFs.

Buy and hold – invest long term
ETFs are held in your portfolio for years, regardless of short-term market fluctuations. This strategy aims to benefit from the long-term development of the markets.
Core-satellite strategy – diversify broadly, add focus
Here, the main share of your capital goes into broadly diversified ETFs that track large indices. Smaller amounts are then targeted at specific themes or markets to align your portfolio with individual return opportunities.
Savings plan with cost-average effect – invest regularly
A fixed amount is invested in ETFs at regular intervals, regardless of the current price. This means fewer stocks are bought when prices are high and more when they’re low, leading to an average purchase price over time.
Thematic or sector ETFs – targeted investing
This strategy focuses on specific areas such as tech, environment, health or world regions. It allows you to reflect personal interests and market expectations in your portfolio. While this can offer extra return potential, it's usually linked to higher risk.

Use ETFs to diversify your portfolio effectively

A well-balanced portfolio includes a mix of asset classes, such as ETFs, individual stocks, commodities or other digital assets. ETFs can serve as a flexible foundation and help you structure your portfolio for long-term success.

One common approach is the core-satellite strategy. The core of the portfolio usually consists of broadly diversified ETFs, forming the base and tracking general market trends. Around this, you add satellites—smaller positions in individual stocks, thematic ETFs or alternative assets like precious metals. This allows for targeted focus without overly concentrating your portfolio.

You can also combine different ETF types (regional index funds, sector-based products or varying risk categories) to build a portfolio that’s both diversified and tailored to your goals and preferences.

Bitpanda also gives you the option to diversify your portfolio. In addition to ETFs, you can trade stocks, precious metals and digital assets like cryptocurrencies – all in one single account. This makes it easy to combine various asset classes into one unified strategy.

Frequently asked questions about investing in ETFs

Now you've got a good overview of how you can invest in ETFs. In our FAQs, you'll find more useful information on the topic.

How do I start investing in ETFs as a beginner?

Many beginners wonder how to take the first step, especially without prior experience, and which ETFs might be suitable. Investing in ETFs as a beginner works best when the process is simple, structured and flexible. Starting with a clear plan lets you gain early experience and systematically build wealth with small amounts.

Three simple steps to get started:

Open an account: A securities account is essential for buying ETF shares. Many platforms offer an easy sign-up and digital verification process, even for those with no prior knowledge
Choose an ETF and savings plan: A globally diversified ETF combined with a monthly savings plan makes investing predictable and helps you invest regularly in small steps
Invest regularly and stay consistent: By making regular contributions, you benefit from the cost-average effect and don't need to worry about the "perfect timing"

How much money should I invest in ETFs?

How much you invest in ETFs depends on your financial situation, savings and goals. There's no fixed amount that suits everyone. However, an ETF savings plan can start with small amounts. Many people begin with €25 or €50 per month, investing regularly in selected indices.

The 50-30-20 rule can help guide your budget: according to the rule, you might use 50% of your income for essential expenses, 30% for lifestyle and 20% for saving or investing. What matters most is only investing money you won’t need in the short term. If your savings rate fits your everyday life and you have emergency funds in place, your ETF portfolio can grow steadily over time without pressure.

Are ETFs a low-risk investment?

ETFs aren’t considered low-risk. Like all exchange-traded securities, they are subject to market fluctuations and can lose value. The level of risk depends on the index the ETF tracks, how volatile the market is and how long the shares are held.

Compared to individual shares, ETFs may carry lower risk because their performance is spread across many companies. So, those who invest long term and focus on broad diversification are better positioned to absorb market swings.

Still, losses are possible with ETFs. To reduce risk, your strategy should match your goals and personal situation. Your ETF investments should also be part of a well-diversified portfolio.