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Is the Allianz Wachstum Europa A Fund Worth It for Expats in Germany?
The Allianz Wachstum Europa A Fund has existed since 1965 and is one of Allianz Global Investors’ classic European equity portfolios. It invests mainly in companies with headquarters or major operations in Europe, promising long-term growth through active management. For international professionals living in Germany, it may appear to be a convenient way to participate in European markets while saving for the future. But when taxes, costs and inflation are included, is it really worthwhile?
In this analysis we review how the fund works, what it actually costs, and whether it fits within a broader retirement and investment strategy for expats in Germany. As always, our perspective at Finanz2Go Consulting is independent and fee-based. You can book a free consultation to have your own portfolio reviewed.
How the Allianz Wachstum Europa A Fund Works
The fund is an actively managed European equity portfolio aiming for above-average capital growth. Its managers select individual companies (“stock picking”) based on growth potential, market position and innovation strength. It includes both large blue-chip corporations and selected small- and mid-cap firms.
The investment universe covers various European markets and sectors, giving investors diversified exposure within Europe. However, because it is actively managed, it comes with higher ongoing fees than a comparable index-tracking ETF. Performance therefore depends both on stock selection and on the fund’s internal cost efficiency.
Example Scenario Used for Analysis
- Initial lump-sum investment: €80 000
- Monthly contribution: €250
- Investment period: 27 years
- Total contributions: €161 000
- Investor age: 40 → 67 years
These assumptions come from a real contract case study similar to those used by independent analysts. They allow a realistic estimate of long-term growth, costs and taxes.
Cost Structure – the Hidden Performance Killer
Over 27 years the total cost burden of the Allianz Wachstum Europa A Fund was calculated at approximately €206 000 – higher than the entire capital invested.
- Front-end and redemption fees: €48 454
- Fund management and capital costs: €157 800
- Total costs: ≈ €206 250
These expenses include the fund’s annual management fee (around 1.5 % p.a.), trading costs and one-time purchase surcharges. Compared with a low-cost ETF solution with 0.2–0.4 % p.a., the difference compounds dramatically over time. According to Stiftung Warentest and BaFin, high cost ratios are the key reason why many active funds underperform their benchmark indices.
Performance and After-Tax Outcome
After 27 years, the gross end capital was €359 375. Taxes (capital-gains tax plus pre-tax “Vorabpauschale”) totalled €46 340, leaving a net payout of €329 675. Inflation, however, changes everything: with 2 % average inflation, that amount equals only €193 000 in today’s purchasing power – a real gain of roughly €32 000 over nearly three decades.
This equates to a real annual return of barely 1 %, far below the historical 5–6 % average of diversified European equity markets. For many expats, this means opportunity costs of more than €150 000 compared with a cost-efficient ETF strategy.
Why Costs Matter More than Past Performance
Active managers often highlight successful years, but over long periods persistent outperformance is statistically rare. Independent research from the OECD and the ESMA confirms that in Europe less than 15 % of active funds outperform their benchmark after costs for ten years or longer. For expats who may live and work across countries, cost transparency and liquidity are usually more valuable than theoretical outperformance.
Taxation for Expats Investing in German Funds
As a German-registered fund, Allianz Wachstum Europa A is subject to the German Investment Tax Act (Investmentsteuergesetz). For German tax residents, dividends and capital gains are taxed through the 26.375 % “Abgeltungsteuer” (including solidarity surcharge). For expats, double-taxation agreements determine whether gains are taxed in Germany or in the country of residence.
If you move abroad before selling your holdings, taxation can become complex. Some countries recognise German withholding tax; others may tax gains again. That’s why proper cross-border tax planning is essential when building long-term investments in Germany.
Inflation and Real Value Considerations
Inflation quietly erodes nominal profits. At 2 % average inflation over 27 years, every €1 today will buy only €0.59 worth of goods. Thus, an investment that seems to double in nominal value may in reality deliver only modest real growth. To preserve purchasing power, investors need a mix of globally diversified equity and inflation-resistant asset classes. Learn more in our guide to inflation-proof investing in Germany.
Who Might Consider the Allianz Wachstum Europa A Fund?
The fund may suit:
- Investors seeking long-term exposure to European equities
- Residents comfortable with active-management costs
- Individuals preferring a traditional banking relationship
It is generally less suitable for:
- Expats who value global diversification and flexibility
- Investors focused on cost efficiency and transparency
- Those using private wealth management solutions or self-directed ETFs
Independent View and Industry Perspectives
According to Handelsblatt and Focus Money, many long-standing actively managed funds have struggled to justify their fees in an era of transparent, index-based investing. The regulator BaFin now demands clearer disclosure of all cost components so consumers can compare total-expense ratios more easily.
For expats, the combination of high fund fees, limited tax clarity and inflation makes independent advice indispensable. A cost comparison often shows that switching to a diversified ETF strategy could increase long-term returns by 1 – 2 percentage points annually – equivalent to tens of thousands of euros.
Summary of Key Findings
- Total costs exceed €200 000 over 27 years – higher than the invested capital.
- Net real return after tax and inflation: ≈ 1 % p.a.
- Active management has not added significant value after costs.
- Expats face additional tax and currency considerations.
- ETF portfolios offer higher efficiency and international portability.
In Part 2 of this article we will present a side-by-side cost and return comparison between the Allianz Wachstum Europa A Fund and a low-cost ETF portfolio for expats in Germany. We will also include a practical checklist and FAQ section.
To understand how your current investments compare, book your free consultation with Finanz2Go today.
Allianz Wachstum Europa A Fund vs ETF Portfolio – A Cost and Return Comparison
To evaluate whether the Allianz Wachstum Europa A Fund is competitive for long-term investors, we compared it with a diversified ETF-based investment portfolio. The figures below are based on realistic assumptions over 27 years with identical contributions.
| Category | Allianz Wachstum Europa A Fund | ETF Portfolio (Example) |
|---|---|---|
| Annual total costs | ≈ 1.8 – 2.0 % | ≈ 0.25 – 0.45 % |
| Average net return (p.a.) | ≈ 4 – 5 % | ≈ 6 – 7 % |
| Total capital after 27 years (€250 / month + €80 000 lump sum) | ≈ €359 000 (gross) | ≈ €500 000 – €550 000 (gross) |
| Real value after 2 % inflation | ≈ €193 000 | ≈ €290 000 – €310 000 |
| Liquidity / access | Full liquidity but possible front-end load on sales | Full liquidity world-wide through broker account |
| Transparency of fees | Moderate – fees within fund structure | High – all costs visible on broker statement |
| Portability for expats | Tax rules depend on German residency | Portable world-wide |
The comparison shows that the difference of only two percentage points in annual return compounds into a gap of well over €100 000 in net capital over 27 years. For most expats, such long-term cost differences outweigh short-term market movements.
Checklist – How Expats Can Evaluate Investment Funds in Germany
- Residency planning: Will you stay tax-resident in Germany until retirement?
- Currency exposure: Are you comfortable being fully invested in euro assets?
- Liquidity needs: Could you require funds before your target date?
- Cost transparency: Do you know the exact percentage you pay each year?
- Diversification: Is the portfolio global or limited to Europe?
- Tax impact: Have you checked double-taxation agreements for your home country?
- Inflation resilience: Are returns shown in real terms or nominal?
- ESG criteria: Do sustainability funds justify their costs?
- Independence of advice: Is your advisor fee-based or commission-based?
- Benchmarking: Have you compared results with an independent wealth-management approach?
If you are unsure about any of these points, you can receive a personalised, English-language review by booking a free consultation with Finanz2Go.
Independent Research and Market Insights
Reports from Stiftung Warentest, OECD Finance Department and BaFin consistently show that active European equity funds rarely beat low-cost index solutions over the long term. The primary reason is cost drag and human selection bias. For expats who value flexibility and transparency, a globally diversified ETF portfolio remains the most efficient path to long-term wealth accumulation.
Frequently Asked Questions (FAQ)
1. What is the Allianz Wachstum Europa A Fund?
It is an actively managed European equity fund from Allianz Global Investors, focusing on growth companies across Europe.
2. Is this fund suitable for expats in Germany?
Only for those planning to stay long-term and comfortable with euro-based investments. Mobile expats often prefer globally diversified ETFs.
3. How high are the total costs?
Around 1.8 – 2 % per year plus front-end fees of up to 5 %. These reduce long-term returns considerably.
4. Can I sell the fund at any time?
Yes, the fund is liquid, but sales may involve spread and tax implications. Verify timing with your advisor.
5. How is the fund taxed for expats?
Gains and dividends are subject to the German capital-gains tax of 26.375 %. Double-taxation treaties determine foreign tax credit eligibility.
6. Does Allianz guarantee returns?
No – as an equity fund there is market risk. Allianz manages the portfolio but does not guarantee performance.
7. What are the main risks?
Market volatility, manager risk, and currency fluctuations within the euro zone. These are typical for active funds.
8. How does it compare to ETF portfolios?
ETFs track indexes directly, have lower costs, and usually yield higher net returns with greater transparency.
9. What if I move abroad before selling?
You keep the investment, but tax treatment changes. Seek cross-border advice to avoid double taxation.
10. How can I get an independent analysis of my fund portfolio?
Simply book a free Finanz2Go consultation to receive a transparent comparison of costs, returns and tax implications in English.
Final Assessment and Recommendations
The Allianz Wachstum Europa A Fund offers European market exposure within a long-standing brand framework. Yet its high cost structure and limited diversification make it less attractive for expats who seek global growth and flexibility. Inflation and fees together erode most of the fund’s real gains over time.
By contrast, a well-diversified ETF portfolio can deliver higher expected returns with lower risk through global spreading and transparent cost control. If you already hold the Allianz fund, an independent review will show whether a switch to modern ETF solutions is financially advantageous.