In times of market volatility and lack of transparency, investors wish for one thing above all: security.
Security is a basic human need. We want to invest our money at good returns—and still sleep peacefully at night. To achieve this, it’s important to understand the laws of the market:
💬 Only those who take risks have the chance to gain big.
🔼 High risk = potentially high return
🔽 Low risk = potentially low return
But there are smart compromises. Broad-based ETF products—like the MSCI World or the All Countries World Index—offer both: solid returns and a certain level of safety. Let’s take a closer look at the MSCI World.
What Is the MSCI World?
📊 The MSCI World includes around 1,600 companies from 23 developed countries across various industries.
This level of diversification offers investors a certain degree of stability. The historical average return of this ETF has been around 7–10% per year—which is quite remarkable.
However, let’s not pretend there are no risks or downsides. When we look back at major market crashes, we see that even the MSCI World has experienced sharp declines.
Crisis Happens – But ETFs Show Resilience
| 🗓 Period | 📉 Decline | 📈 Recovery |
|---|---|---|
| Dot-com bubble (2000–2003) | approx. –50% | Recovered quickly afterwards |
| Financial crisis (2008) | approx. –40% | Strong rebound followed |
| COVID-19 crash (2020) | approx. –30% | Rapid recovery and growth surge |
These examples clearly show that almost every financial product on the stock market is subject to fluctuations.
However, it’s also clear that a broadly diversified ETF like the MSCI World can absorb a lot of volatility—and once the economy picks up again, this can lead to strong growth. Numerous charts and historical data support this.
ETFs vs. Actively Managed Funds – A Powerful Comparison
Of course, there are products that can generate higher returns—like actively managed investment funds, venture capital, or trading. But these require a high risk tolerance and solid expertise to avoid financial missteps.
Additionally, higher fees, especially in actively managed funds, can have a significant negative impact on compound interest over time.
Let’s illustrate this with a practical example:
📊 Investment Scenario – 30-Year Time Horizon
| Parameter | ETF (MSCI World) | Actively Managed Fund |
|---|---|---|
| Initial investment | $50,000 | $50,000 |
| Investment period | 30 years | 30 years |
| Average annual return (before fees) | 7% | 7% |
| Annual fees (TER) [Total Expense Ratio] | 0.2% | 2.0% |
💰 Portfolio Value After 30 Years
| Investment Type | Effective Return | Final Value |
|---|---|---|
| ETF (0.2% TER) | 6.8% | ≈ $363,061 |
| Active Fund (2.0% TER) | 5.0% | ≈ $216,096 |
👉 Difference: over $146,000
👉 Or in relative terms: the ETF earns approx. 68% more
This stark contrast shows how just a 1.8% difference in fees can lead to a massive gap in returns over time.
For many investors who’ve been paying high fees for years, this realization can feel like a harsh wake-up call.
Conclusion – A Thoughtful Compromise Between Return and Security
An ETF like the MSCI World, with its highly diversified structure, is certainly not a cure-all for risk, but it can be a very solid choice—especially for:
- 🧓 Individuals saving for retirement
- ⏳ Investors who don’t need access to their money in the short term
- 📘 Beginners looking for a balanced and simple entry into the market
It offers a realistic compromise between strong potential returns and a high level of peace of mind.
🔍 What’s Coming Next?
In the weeks and months ahead, we’ll explore and compare various financial products in detail. You can look forward to:
✅ Honest and easy-to-understand comparisons
✅ Practical tips on choosing the right providers
✅ Insights into saving strategies and smart investing
✅ Myth-busting around the world of finance
We’re excited to have you with us on this journey.
And if you’ve got questions—don’t hold back. We’re here for you! 🙌