The German-based marketplace savings account provider Raisin has announced a new ETF portfolio service for its 100,000 customers launched in association with Vanguard and BNP Paribas.
The company says the ETF proposition represents the "second pillar" of its retail investment offering with four portfolios offering varying degree of exposure to equities.
Til Rochow, head of investment products at Raisin, told ETF Stream that Raisin's customers were looking for not only the bets rates on their short-term savings but also some meaningful investment solutions.
"For the latter part ETF-portfolios are a logical choice," he said. "Our customers value the convenience to have access to multiple products via one login and platform."
Rochow said the total product cost would be below 0.5%. The portfolios come with a minimum investment amount of €2,000.
The popularity of ETFs with the German investment public is building although Rochow pointed out that the penetration of passive products generally remained low at around 10% of total retail fund holdings.
"As German investors realize that diversified and cost-efficient investing is the best way to build wealth, ETFs start to pick up in popularity," he said. "Regulation on cost transparency such as MiFID II also play a role. In addition, German retail investors increasingly wake up to the idea to shift parts of their substantial savings into investments with ETFs capturing a good share of the inflows."
He added that while the concept of ETFs was understood by most investors in Germany, further education was necessary on investing in capital markets in general and ETFs specifically. "This is part of our ambition," said Rochow.
He noted that the robo-advice model was also beginning to build momentum in Germany, but he didn't see this as being a threat to Raisin. "Volumes are low overall with many smaller players with different investment strategies," he said. "We do not see robo-advisors as our competitors. Digital investment solutions will grow strongly overall - at the expense of traditional product offers and channels."
