Which ETFs for the Altersvorsorgedepot? The selection guide

Tilman Freyenhagen

Published on 14 June 2026 · Updated on 7 August 2026 · Managing Director & Partner, Alsterspree Verlag GmbH

The role of ETFs in the new Altersvorsorgedepot

The new, state-subsidised Altersvorsorgedepot is best suited to broadly diversified, low-cost equity ETFs that track a global index. The most important criteria for choosing one yourself are maximum diversification across countries and sectors, a low total expense ratio (TER), a sufficiently large fund volume, the replication method, and the tax treatment of distributions. Our knowledge section helps you assess these criteria independently and build the skills to manage your own account.

The new Altersvorsorgedepot represents a fundamental shift in state-subsidised private pension provision. With its launch in 2027, investors are no longer required to buy expensive contribution guarantees, which previously held back the return potential of classic Riester-Rente (Germany's existing subsidised private pension) contracts^[1]. This move away from rigid guarantees opens up substantially higher long-term return potential, since savings contributions can now flow 100 percent into equity ETFs. In this new subsidised framework, ETFs form the functional core for participating in the global market cost-effectively and with broad diversification^[2]. To analyse different savings scenarios and the exact subsidy effect, you can use our subsidy calculator.

This guide gives you the practical grounding to apply the selection criteria on your own, without recommending individual products. Please note that all examples and criteria given are for illustration only. Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG. Alongside the self-directed route, our independent advice service is also available for extra personal support.

Criterion 1: global diversification as the foundation

Anyone building wealth for retirement over the decades has to keep the risk of price losses as low as possible. The most important tool for this is maximum diversification. Spreading capital across different countries, sectors and currencies prevents the weakness of a single market from putting your entire retirement provision at risk. Broad market indices form the indispensable foundation of any Altersvorsorgedepot, because they systematically reduce single-stock risk.

A classic example of this broad diversification is the world-famous MSCI World index. This equity index covers around 1,400 large and mid-sized companies from 23 developed countries, and thereby covers about 85 percent of the total market capitalisation of these regions^[3]. Instead of tying the fate of your own pension to a single country like Germany or the US, you participate directly in the growth of the entire global economy. Should a single large corporation go bankrupt, the impact on your overall portfolio is vanishingly small, thanks to the extremely fine diversification.

For this reason, risky sector bets or highly specialised theme ETFs aren't suitable for your core account. They increase volatility and run counter to the safety principle of dependable retirement provision. For your strategic planning, our knowledge section offers detailed criteria for structuring your account. To also find out how state allowances can affect your long-term savings goal, our interactive subsidy calculator is available to you. Please note: this guide is purely for financial education and does not constitute investment advice.

Criterion 2: minimising ongoing costs (TER)

A decisive lever for long-term wealth building in the new Altersvorsorgedepot is ongoing product costs. Because private contributions benefit from the compound-interest effect over the decades, even the smallest percentage point in fees noticeably reduces your final capital. While classic, actively managed investment funds usually carry annual management costs of around 1.2 percent, the fees of broadly diversified, passive ETFs average only about 0.2 percent a year^[4]. This difference may seem minimal at first glance, but over a typical working and accumulation phase of 30 to 40 years it adds up to a five-figure euro amount, deducted directly from your state-subsidised return.

The so-called total expense ratio (TER) serves here as the primary cost indicator, showing the annual total cost ratio of the given product. It covers internal administration costs, fund-level account costs and other operating costs^[4]. To assess actual performance even more precisely, self-directed savers should also watch the tracking difference in the knowledge section^[5]. This metric indicates how far the ETF's real return deviates from the performance of the index it tracks. A low, or even negative, tracking difference shows that the ETF tracks the index highly efficiently, potentially offsetting internal costs through securities lending. This gives investors a transparent basis for the long-term choice. (Not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG.)

Criterion 3: optimal fund size and fund age

For long-term success in the Altersvorsorgedepot, the durability of your chosen asset classes plays a central role. Our knowledge section recommends that self-directed savers take a close look at fund volume and fund age before buying. To run an ETF economically, fund providers need a certain minimum volume. If the assets under management stay permanently below a certain threshold, the fund risks closure or a merger, which can create tax or administrative disadvantages for investors in the subsidised account.

In practice, a fund volume of at least 100 million euros is considered the key institutional threshold for permanently economical operation^[6]. If the volume stays below that for years, the fund company will not infrequently opt for liquidation or a merger with a larger ETF^[7]. For you as a long-term-oriented saver, such a fund closure doesn't mean a loss of your capital, since the fund's assets are protected as a segregated fund. However, a liquidation does force you to sell your units prematurely and reinvest the money, which can incur transaction costs.

In addition to volume, you should look for a fund age of at least five years. Only after several years on the market can you reliably assess how precisely the ETF tracks its underlying index. This so-called tracking error indicates the technical quality of the replication. Should an ETF be closed despite careful selection, you'll either be paid out the value of your units, or they'll be automatically transferred into a comparable ETF from the same provider. To avoid this administrative hassle in the Altersvorsorgedepot, it's advisable from the outset to focus on established, large-volume core ETFs. Note: these criteria are for general information and do not constitute investment advice within the meaning of the Banking Act (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG).

Criterion 4: a transparent replication method

The replication method determines how an ETF physically or synthetically tracks its underlying index. For your Altersvorsorgedepot, this technical component is an important quality feature, since it affects transparency and your sense of security. Broadly speaking, a distinction is made between physical and synthetic methods, and both approaches have specific characteristics you should weigh when choosing^[8].

Physical replication and sampling

With full physical replication, the ETF provider buys the securities contained in the index in exactly the original proportions. This is the most transparent form of index tracking, since you invest directly in the actual shares. For very broad indices with thousands of individual constituents, however, this method reaches its limits. Here providers use so-called optimised sampling: only a representative selection of the most influential shares is bought, to save transaction costs while still tracking performance precisely^[9]. The knowledge section shows you how these cost advantages can pay off in the long run.

Synthetic replication via swap agreement

Synthetic ETFs track the performance of an index through a swap agreement with a financial institution. The ETF often holds different securities in its portfolio than the actual index, and offsets the difference via the swap counterparty. Although this method can offer tax advantages and makes some markets investable for the first time, many private self-directed savers prefer physical replication for their retirement provision. The reason lies in the desire for maximum transparency and avoiding counterparty risk — the risk of the swap partner defaulting — even though this risk is strictly limited by regulation^[8].

Criterion 5: accumulating or distributing? (type of distribution)

When choosing an ETF for your long-term Altersvorsorgedepot, you face a fundamental mechanical decision: what should happen to the returns generated? While distributing funds pay dividends directly into your settlement account, accumulating ETFs retain these gains and automatically reinvest them within the fund's assets. For the accumulation phase of your retirement provision, this difference is of central importance, because automatic reinvestment makes the most of the mathematical compound-interest effect. Because every euro invested can immediately generate new returns, the fund's volume grows exponentially without you having to intervene actively.

Distributing ETFs, by contrast, require ongoing manual effort from you. If you don't immediately reinvest the dividends paid out, the capital sits unused in your settlement account, which acts as a drag on returns. In addition, manual reinvestment often incurs fresh order fees, unless your broker offers these transactions free of charge. For this reason, accumulating funds are generally considered the more efficient and convenient choice for long-term wealth building, since they fully automate the reinvestment process.

• Accumulating ETFs: automatic reinvestment of dividends within the fund's assets, maximum compound-interest effect with no transaction costs, ideal for the decades-long accumulation phase.
• Distributing ETFs: regular payouts to the settlement account, requiring manual reinvestment to avoid losing returns, potentially additional order fees on reinvestment.

Although the introduction of the Vorabpauschale (advance lump-sum tax) has largely aligned the German tax treatment of both fund categories, the logistical advantage of accumulation remains^[10]. For self-directed savers building a tax-subsidised Altersvorsorgedepot, minimising friction is a decisive success factor. We invite you to discover deeper criteria and comparative analyses in our knowledge section. Note: this information service is for pure education and does not constitute investment advice.

Quick checklist: all ETF selection criteria at a glance

Building your Altersvorsorgedepot yourself comes down to a rational, criteria-based selection. Because this is a long-term investment spanning decades, you should avoid speculative single bets and instead build on a stable foundation. Our knowledge section gives you the theoretical grounding to assess suitable index funds independently. Beyond short-term market trends, four fundamental quality features matter most for self-directed savers, minimising risk and securing your long-term return.

These standardised criteria ensure that your subsidised account rests on a highly stable, cost-efficient foundation. A sufficiently high fund volume protects you, for example, from the sudden closure of a fund that's too small, which could trigger unforeseen tax adjustments^[11]. With these neutral guidelines, you can efficiently filter the huge range of products on the market and prepare optimally for implementation.

Please note when making your choice that, while these criteria help minimise risk, they are no guarantee of future returns. Every equity-market investment carries fluctuation risk (not investment advice within the meaning of § 1 Abs. 1a Nr. 1a KWG). Our provider comparison helps you find an account with low savings-plan fees that fits your strategy perfectly. You can also use the subsidy calculator to work out your potential subsidy in detail.

From the criteria grid to a concrete decision

Once you've internalised the theoretical criteria grid for your long-term retirement provision, practical implementation takes centre stage. From 2027, the new Altersvorsorgedepot gives you the historic opportunity to build state-subsidised ETF savings plans on your own or with professional support. With us, you'll find two equally valid, reliable paths, which depend entirely on your personal preferences, your individual prior knowledge and how much time you have available. On the Vorsorgedepot-Lotse portal, we support you independently in choosing the path that suits you.

• The self-directed path: if you want to implement your investment strategy yourself and choose your own ETFs, our provider comparison can help. This tool lets you transparently and neutrally compare the terms, account fees and available ETF range of the leading neobrokers.
• The advised path: if you have complex questions about tax optimisation, the right asset allocation, or switching existing contracts, our independent advice service is here to help. We connect you with qualified experts for a no-obligation initial conversation, to work out a tailored solution for your personal situation.

Whichever of the two paths you ultimately choose, a solid, data-based foundation is essential. Through the knowledge section you can read in depth about the tax rules and subsidy guidelines. In parallel, use our interactive subsidy calculator to run through different scenarios. The calculator works out precisely your expected state allowance, the tax relief, and your projected final capital compared with a conventional, unsubsidised ETF savings plan.

In this context, please note our legally required neutrality notice: the information, tools and comparisons we provide are solely for independent information and general education for users. They should under no circumstances be understood as personal investment advice, tax advice or legal recommendation. At no point do we provide licensable financial services within the meaning of the law, and in particular we do not provide investment advice under section 1(1a) no. 1a of the Banking Act (KWG)^[12]. The final decision on any investment or contract remains entirely your own responsibility.