neon investment plan: Four new Xtrackers assets you can now buy with 0% trading fees

Introducing another development to our ongoing efforts in supporting you on your financial journey: Our partnership with Xtrackers allows us to further expand our investment offerings with four additional, carefully selected Xtrackers investment products that can be bought with 0% trading fees as part of our new investment plan on neon invest. As with our other partnerships, the cooperation with Xtrackers aims at lowering barriers to investing by empowering you to navigate your financial path with greater flexibility and lower costs. In this blog post, we will dive deeper into the rationale behind our partnership with Xtrackers and our choices.

Who is DWS?

About the offer

Why the S&P 500 ETF?

Why the NASDAQ 100 ETF?

Why the AI & Big Data ETF?

Why the Clean Energy ETF?

Who is DWS?

DWS Group, the issuer of the Xtrackers products, ranks as the largest retail asset manager in Germany and is among the largest global asset managers worldwide. Xtrackers even edged out BlackRock to top the rankings as the strongest ETF issuer in Europe in 2023. Not surprising, given their more than six decades of experience in the ever-evolving global financial markets. In the dynamic investing landscape, Xtrackers and DWS remain committed to innovation and responsible investment around the world. Our partnership with DWS is based on a shared commitment to providing accessible and diverse investment opportunities to our users in order to empower their financial journey. 

About the offer

Together with Xtrackers, we offer you four Xtrackers ETFs that are new to the neon invest universe. The respective regulatory documents for the newly added assets («Factsheet») are linked in this blog post and also available within the neon app: 

• Xtrackers S&P 500 UCITS ETF (IE000Z9SJA06)
• Xtrackers Nasdaq 100 UCITS ETF (IE00BMFKG444)
• Xtrackers AI & Big Data UCITS ETF (IE00BGV5VN51)
• Xtrackers MSCI Global SDG7 Affordable and Clean Energy UCITS ETF (IE000JZYIUN0)

By adding either of those products to your investment plan, you can buy them with 0% trading fees. The only remaining costs for you when buying one or more of those products via your investment plan on neon invest are the federal stamp duty and the respective product costs (TER).

Read on for more information about why we selected those four ETFs from our new partner DWS. 

Why did we choose the S&P 500 ETF?

The Xtrackers S&P 500 ETF aims to fully replicate the performance of the S&P 500 Index, which is a very popular benchmark of the largest 500 publicly traded companies in the United States. With a total of roughly 42 trillion USD in market capitalisation, the companies in the S&P 500 represented roughly one third of the estimated global market capitalisation of around 120 trillion USD at the end of 2023.

We've chosen to offer this ETF for several reasons. First, it increases the selection of highly diversified ETFs available to our users. While the Xtrackers S&P 500 ETF includes 500 companies, many other ETFs on neon invest contain a selection of S&P 500 stocks, leading to a lower diversification. Meanwhile, the Xtrackers S&P 500 ETF gives access to all the stocks listed in the S&P 500 index, leading to a broad coverage of various sectors and industries. In the Xtrackers S&P 500 ETF, the three biggest sectors are IT (29.28%), followed by Financials (13.09%), and Health Care (12.35%). To see the exact distribution of sectors and more, have a look at the fact sheet. (DE: hier).

Secondly, the regional exposure to the US market offers interesting opportunities. The US has a strong growth track record and is home to many innovative global companies. Investing in the S&P 500 allows investors to benefit from the historical performance and potential of the US market.

Apart from the popularity, diversification, and focus on the US market, the Xtrackers S&P 500 ETF also meets our aim of always offering cost-effectiveness: Besides giving you the opportunity to buy this ETF with 0% trading fees as part of our investment plan, the low Total Expense Ratio (TER) of just 0.06% per year means minimal ongoing costs and therefore higher potential returns. And finally, you can start investing in the Xtrackers S&P 500 ETF with as little as 9 CHF (as of early May 2024). With this low entry price, low TER, and no purchase fees as part of the investment plan, the Xtrackers S&P 500 ETF lets investors start building exposure to the strong historical performance of the US stock market with minimal cost.

As you can see, we've considered similar ETFs in terms of entry price and TER, and we’ve also taken into consideration sector representation to make sure that we provide a competitive and easy-to-understand solution that investors can add to their investment plans to benefit from the Xtrackers S&P 500 ETF without purchase fees instead of the usual 0.5%. All in all, this offer gives you easy access to a broad range of US companies at a very low price.

Why did we choose the NASDAQ 100 ETF?

This ETF is set up to replicate the performance of the Nasdaq 100 Index, an index that includes 100 of the largest non-financial companies listed on the Nasdaq stock exchange, which mainly trades companies in the technology, consumer discretionary, and healthcare sectors. However, the index itself and, by consequence, the Xtrackers NASDAQ 100 ETF contain a lot of technology stocks and growth-oriented companies.

So, why did we choose to offer the Xtrackers NASDAQ 100 ETF to be bought without trading fees as part of the investment plan? The short answer is: We’ve chosen it because it gives you access to popular companies within an index that has shown solid performance in the past and because it’s low-cost in terms of ongoing costs (TER) as well as in terms of entry price. Let’s have a closer look:

Historically, due to its heavier weighting in technology stocks, the Nasdaq 100 has been doing better than other indices such as the S&P 500, both in absolute and relative terms. In terms of absolute returns, the Nasdaq 100's return of 450% was significantly higher than the S&P 500's 180% return over the last decade. In relative performance, the Nasdaq 100's annualised return over the past 10 years was around 20%, compared to around 11% for the S&P 500, meaning the Nasdaq 100 outperformed the S&P 500 by around 9 percentage points per year on average over the last decade. This outperformance can be attributed to the Nasdaq 100’s heavy weightings in major tech companies, which have seen tremendous growth and stock gains during this period due to them driving innovation and influencing broader market trends that have shaped the global economy and are continuing to do so. The tech heavyweights in question are Microsoft, Apple, NVIDIA, Amazon, Meta Platforms (Facebook’s parent company), Alphabet (Google’s parent company), and Tesla – also known as the Magnificent 7. While the exposure to tech stocks led to a solid performance in the past, it also meant that there was more volatility in the Nasdaq 100 Index. Be that as it may, the Nasdaq 100 has delivered considerable long-term returns for investors who have remained invested over extended periods. And while past performance is no indication of future results, understanding the historical performance of the NASDAQ can still provide valuable insights.

As for the costs, the Xtrackers NASDAQ 100 ETF has a TER of just 0.20% and is currently priced at around 37 CHF (as of May 2024). In comparison, similar Nasdaq 100 ETFs have higher TERs as well as higher entry prices: The iShares Nasdaq 100 ETF (accumulating dividends) has a TER of 0.33% and an entry price of 922 CHF and the Invesco EQQQ Nasdaq-100 ETF (distributing dividends) has a TER of 0.30% with an entry price of 392 CHF. As you can see, the Xtrackers NASDAQ 100 ETF has both the lowest TER and the lowest entry price. And if you choose to buy it via the neon investment plan, you don’t even have to pay the usual purchase fee of 0.5% – win-win for neon users! For more information, take a look at the ETF’s fact sheet 

Why did we choose the AI & Big Data ETF?

This is the first ETF on neon invest that focuses on companies involved in Artificial Intelligence (AI) and Big Data, two fields that are reshaping industries worldwide. From technology giants like NVIDIA and Microsoft to consumer electronics manufacturing giant Samsung, these companies are at the forefront of innovation through AI and Big Data. We’ve chosen this ETF because we want to give you the possibility to tap into the potential of disruptive technologies and get exposure to the cutting-edge technologies that are driving tomorrow's world. 

This ETF tracks the Nasdaq Global Artificial Intelligence and Big Data Index and offers access to these transformative sectors. With 88 underlying assets (as of May 2024) spread across global markets, investors gain diversified exposure without the hassle of picking individual stocks. 

By investing in the Xtrackers AI & Big Data ETF instead of trying to pick individual stocks, investors have instant diversification, they don’t need to monitor as much, and they benefit from lower costs – especially if the ETF is bought via the neon investment plan, in which case we waive the usual 0.5% trading fees for purchasing this specific ETF. Furthermore, with 0.35% TER, the Xtrackers AI & Big Data ETF has the lowest TER compared to other ETFs that also track AI & Big Data companies according to JustETF. 

As of May 2024, the ten companies with the biggest weight in the Xtrackers AI & Big Data ETF are NVIDIA, Meta Platforms (Facebook), Amazon, Salesforce, Microsoft, Alphabet (Google), Samsung, AMD, Bank of America, and SAP. All of these companies are expected to benefit from the transformation powered by AI. Looking at the top ten, it comes as no surprise that US companies make up 87.19% of the ETF, followed by South Korea (5.23%) and Germany (3.56%). 

As you can see, investing in the Xtrackers AI & Big Data ETF opens the door to a world of innovation and potential growth, allowing investors to participate in the transformative power of AI and Big Data. For more information, have a look at the fact sheet by clicking here. 

Why did we choose the Clean Energy ETF?

The Xtrackers MSCI Global SDG 7 Affordable and Clean Energy UCITS ETF is the only ETF that fully replicates the index with the cryptic name MSCI ACWI IMI SDG 7 Affordable and Clean Energy Select Index. So far, so good. But what do all these acronyms mean? Let’s unpack: First, it’s an index calculated and published by the international index provider Morgan Stanley Capital International (MSCI). The index provides access to large, mid, and small cap companies from developed and emerging markets around the world, making it an All Country World Index (ACWI). The companies in the index are all part of Investable Market Indices (IMI) and the index specifically aims to track companies that contribute positively to the Sustainable Development Goal Number 7 (SDG 7 = Affordable and Clean Energy) of the 17 Sustainable Development Goals outlined by the United Nations. 

Now that we’ve dissected the name, let’s have a look at the reasoning behind choosing this ETF for neon invest in general, and as an ETF with 0% purchase fees as part of our investment plan. The main reason is that we want to give our users the possibility to invest in the field of affordable and clean energy. Another reason is its comparatively low TER of 0.35% – ETFs that are focussed on niche-topics are harder to build and they require more management effort due to more changes in the underlying companies. This additional effort leads to a higher TER in ETFs that track specific topics. With that being said, considering the Xtrackers Clean Energy ETF’s focus on a niche industry, its TER of 0.35% is still low compared to other ETFs that also give exposure to clean energy (for example the iShares Global Clean Energy UCITS ETF with a TER of 0.65% or the Invesco Global Clean Energy UCITS ETF with a TER of 0.60%). 

In conclusion, the Xtrackers Clean Energy ETF stands out as an interesting choice for investors looking for access to companies that are involved in sustainable energy solutions. With its meticulous replication of the MSCI ACWI IMI SDG 7 Affordable and Clean Energy Select Index, coupled with its competitive TER, this ETF is a promising title for potential long-term growth and therefore aligns perfectly with our commitment to affordable investing at neon. For more detailed information, have a look at the fact sheet. (DE: hier)

You can find more information on how we earn money on our Partner philosophy blog.

If you want to know more about our investment plan, click here. And if you want to have more information about other assets you can buy with 0% trading fees as part of our investment plan, check out this page.