100 Years of World Savings Day: Why Saving Through Equities, Equity Funds and ETFs is Attractive

As we celebrate the 100th World Savings Day tomorrow, Deutsches Aktieninstitut highlights the return opportunities of long-term equity investments. Historically, broad diversification has yielded average annual returns of six to nine percent. This is particularly important for retirement planning.

‘The European Central Bank again lowered the key interest rate in October, making investments in instant access and fixed-term deposit accounts less attractive. However, these are not suitable for long-term successful investments anyway. Equities, equity funds and equity-based ETFs are clearly the better choice for long-term asset accumulation and retirement provision. Unfortunately, as the recently published Allianz Global Wealth Report shows, still too few Germans are taking advantage of this opportunity,’ says Henriette Peucker, Chief Executive and Member of the Board of Deutsches Aktieninstitut.

Per capita assets in Germany significantly lower than in the USA

According to the report, German citizens have financial assets of around 95,000 euros per capita on average. In the US, by contrast, where there is a greater affinity for equities, the figure is more than three times as high at around EUR 314,000. ‘Despite the Germans’ affinity for saving, they achieve low returns. On the 100th World Savings Day, we would like to point out that more investment in equity-based products would change this,’ says Peucker. 

For example, anyone who opened a DAX-based investment fund savings plan on World Savings Day 20 years ago and saved 50 euros each month since then would have invested a total of 12,000 euros in the stock market. They would have 28,000 euros in their portfolio today. This corresponds to a gain of 16,000 euros and an average return of around 7.9 percent per year. ‘Saving in equity-based funds or equity funds pays off, as our example shows,’ emphasises Peucker.

World Savings Day was launched 100 years ago in October at the 1st International Savings Banks Congress to commemorate the importance of savings. Since then, World Savings Day has been celebrated every year in the last week of October.

Deutsches Aktieninstitut's yield triangles on the DAX, the Euro STOXX or the MSCI World impressively illustrate the attractiveness of investing in equities over a long period of time.