Invest in ETFs directly or through a pension plan
Learn how Pensionfriend uses automatic hassle-free rebalancing and a tax-shield to lower cost and select the highest returning ETFs
Compare investing in ETFs with an ETF-based Private Pension Plan
As an investor, you nowadays benefit very much from the existence of ETFs (Exchange Traded Funds) that allow you to buy, for example, widespread indices at low cost.
ETFs are typically much better than mutual funds that are not traded. Mutual funds often have lower volumes and higher costs, and the risk of choosing one with a poor investment approach is significant. It's important to note that there are also many speculative, actively managed, high-cost, or esoteric ETFs.
Dr. Chris Mulder leads our portfolio selection team. He has trained thousands of public sector officials managing hundreds of billions in investments. The training is to the highest standards as official investments are subject to very high levels of scrutiny. This rigorous approach underpins our investment selection process.
PPP | Broker |
|---|---|
Tax shield: no taxes until you withdraw | Annual withholding tax of currently 0,33 %. Taxes at 26,375 % whenever capital gains are realized, exceeding the withholding tax |
15 % of gain in stock ETFs are exempted all the time. Of the remaining capital gains, 50 % is tax-exempt if you hold it until after 62 and for over 12 years | 30 % of gain in stock ETFs are exempted all the time |
Hassle-free, free portfolio rebalancing, transparent cost structure, annual reporting on the portfolios | You are responsible for rebalancing, fees, and effective costs often non-transparent, with no reporting on your portfolio |
Investment advisory included in the fee; including index selection and selection of ETFs with superior tracking difference vis-à-vis the index | Self-investment is less effective. Typically, returns are 3–4 % lower than a standard benchmark. You need to pick your ETFs or pay a broker 0,5–1,5 % for advice and reporting |
You can also pick your ETFs from our list of 500 ETFs to design your own portfolio apart from our in-house recommendations | Thousands of instruments are available, but excessive choice can lead to inaction bias. |
Partner/child benefit: If you pass away, your beneficiary will inherit the portfolio value of this plan within 4 weeks and without being subject to any capital gains tax. Easy reassignment of the beneficiary can help you reduce inheritance taxes. | No exemptions from cap gain tax in case of death. No easy reassignment of the beneficiary. |
Looking for a Private Pension Plan for ETF Investors?
Our Private Pension Plan is ideal for experienced investors and offers many advantages compared to self-investment.
Boost my ETF returnsWhat is better in my case, investing in ETFs through a broker or a Private Pension Plan?
A low-cost broker is better if you:
Invest for a short period (under 5–8 years)
Invest in individual stocks or special products like options
Invest small amounts (up to 10.000–15.000 €)
Belong to the 1–3 % of people who can outperform the market through active management
Pensionfriend's Private Pension Plan (PPP) is better if you:
Plan to hold assets for a longer period, especially until after age 62 or until your children turn 18
Prefer delegating investments to professionals with an unbiased, high-return, low-fee approach
Value flexibility to withdraw funds at no cost in case of unusual events
Want to determine key risk and choice parameters (such as maximum loss)
Appreciate the ease of changing beneficiaries with no capital gains tax for survivors
A low-cost broker is better if you: | Pensionfriend's PPP is better if you: |
|---|---|
Invest for a short period of time (under 5–8 years) | Intend to hold your assets for a longer period, especially until after you turn 62 or until your kids turn 18 |
If you belong to the 1–3 % of people that can outperform the market through active management ☺️ | Like to delegate your investment to professionals with an unbiased approach to achieving high returns in addition to having low fees that result in a much better pension |
Invest only small amounts. For amounts up to 10.000 € — 15.000 € you can use the tax-free threshold | Like to have the flexibility to withdraw at no cost in case of unusual events |
Invest in individual stocks or special products like options. | Like to determine the key risk and choice parameters (such as the maximum loss) |
Like the ease of changing a beneficiary and having your survivors pay no capital gains tax |
Bottom line: While a low-cost broker is a great option for small amounts or learning to invest, for serious retirement investments, professional, low-cost, and credible advice is superior.
Pensionfriend aims to be the no-brainer, credible, superior investment solution: flexible, low-cost, transparent, tax and return optimized. Better than robo-advisors, brokers, or any other PPP provider, and better than other supplementary pension methods.
Our core recommendation is to delegate the management of the bulk of your portfolio, even if you are quite a good investor yourself.
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We help you invest and retire safely and sound with a low-cost, high-performance ETF pension plan.
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