A deposit account
You need an account with a broker of your choice. Depending on where you want to use our service from, make sure that American and German stocks are tradable. Please consider the following: The monthly rebalancing results in an average 4-5 transactions per month. Some banks charge high transaction fees (either in absolute terms or as a percentage of the order volume), which can have a burden on the achieved performance. At Penta Trading we favor using a neo-broker for our services. These have no custody fees and extremely low transaction costs. In principle, the following 4 are well suited if you are based in Germany and even in some places in Europe. Here, Trade Republic and Scalable Capital are better suited for savings plans (larger selection, many premium partners, from €1 savings rate). Individual purchases are cheaper at justTrade and Smartbroker and there are more stock exchanges to choose from. However, some of these brokers may not be available in your region.
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1 € order comission
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free depot
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large ETF and share selection for savings plan
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1 trading place (Lang & Scharwz)
Starting capital
Penta Trading is best managed with an initial starting capital of at least 5 000 €. You can also start with less, but this can have certain disadvantages due to the fact that some shares have relatively high prices per share (e.g., Mercadolibre or Booking), leading to unbalanced portfolios. Penta Trading portfolios consist of 5 equally weighted stocks. This means that with 5 000 €, 1 000 € is invested in each of the 5 identified stocks. For example, if a share costs €450 (or even more than 2 000 €, as with Booking), it is difficult or impossible to approximate the target weighting. Balancing primarily means protection for you and your money to avoid disproportionate losses in case one of the stock does not develop as expected.
For the same reason, partial profits are also realized with well-performing shares. We have tested this approach against a portfolio in which the re-balancing is not performed every month. The result was worse performance. Following the same principle, it is better to reduce all positions to achieve a certain portfolio balance and simply hold more cash, than having one overweighted stock within a Penta Portfolio.
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0 € order comission (from 500 € volume)
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free depot
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large ETF and share selection for savings plan
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3 trading places (Lang & Schwarz, Tradegate, Quotrix)
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Free orders in prime broker (2,99 €/month, from 250 € volume)
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free depot
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large ETF and share selection for savings plan
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2 trading places (Gettex, Xetra)
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0 € order comission (from 500 € volume via Gettex)
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free depot
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small savings plan offer
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all German trading places and international places
What you need to get started
A deposit account and starting capital
How do you invest following Penta Trading?
Here you can find out everything you need to know to get started.
What happens after subscription?
After subscription you will have access to the current portfolio composition, intra-month sales and transaction history.
How to read the tables:
The top 5 stocks represent the selection for the current month. For this purpose, the ISIN (the International Security Identification Number) is given so you can find the security with your broker without a doubt. Current price refers to the price at the close of the first trading day of the month. It is important to highlight that we do not update this value within the current month. We are only interested in the value that applies at the time of the rebalancing, as this determines the real return achieved.
The number of shares and the total value of the position applies only to our sample portfolio. This was started virtually on January 1st, 2022 with 10000 € and does not include taxes or transaction costs. Both numbers are based on the total deposit volume. If you start with 10000 €, 2000 € should be invested in each position if possible. The number of shares depends on the available capital and must be determined by you. However, a rounded approximation should be used. Example: To buy €2000 Jungheinrich shares at 35.52€ per share you would have to buy 56.31 shares. Since fragments are usually not tradable, you would have to round them off and buy 56 or 55 shares. Therefore, you do not buy 64 pieces like in our sample portfolio unless the total volume of your depot is the same.
Intramonth sells are simply sells of shares that have been sold during the month as they did not develop as expected within the given time frame. This will be moved to transaction history at the beginning of the following month.
(n) behind the name of the share indicates new admissions in the portfolio composition.
Rebalancing is indicated by bracketed changes in the number of shares per position (e.g. (+5) in the table above. They indicate increases and partial profit-taking to restore the ideal weighting of 20% per share through purchases and sales. Important: In percentage terms the transaction costs might be very high, especially with small volumes. If there is only a difference of less than €200 between two positions, switching makes no sense. We also often refrain from switching and let smaller differences run (even if we do not incur in transaction costs). This is one of the reasons an ideal distribution of 20% can be implemented more precisely with higher depot volume.
After subscribing, you will see the current composition of the month on the pages corresponding pages of the portfolios. You can then directly implement the model portfolio, even if you start in the middle of the month. All values of the Penta portfolios are up-to-date, unless otherwise indicated. Penta Trading deliberately ignores daily fluctuations in between. However, this means that if you start in the middle of the month, you may get a better or worse performance for the month than Penta Trading gets with the sample portfolios from the beginning of the month. For this reason we grant a free trial period.
The portfolio composition contains the amount of stocks for the 5 positions of our portfolio started with 10 000 € based on their ideal weighting. Here is an example from the past:
Intramonth sells
Jungeheinrich | DE0006219934 | 20% | -3,53 % | |||
Commerzbank (n) | DE000CBK1001 | 20% | 0 % | |||
Teamviewer (n) | DE000A2YN900 | 20% | 0 % | |||
Salzgitter | DE0006202005 | 20% | +7,62 % | |||
Nordex | DE000A0D6554 | 20% | +14,06 % |
Shares | Stock | ISIN | Buy | Sell | Total | Performance |
30 | SMA Solar | DE000A0DJ6J9 | 63,05 € | 77,10 € | 2313,00 € | +22,28 % |
57 | Zalando | DE000ZAL1111 | 35,90 € | 37,81 € | 2155,17 € | +5,32 % |
Portfolio composition
Monthly reallocations
The portfolio composition is adjusted after the first trading day of each month.
The closing price on the first trading day of the month is decisive for the portfolio selection. This means that new compositions are only valid from the 2nd of each month at the earliest. You will get an email notification before the start of the trading day once the portfolio composition has been updated, so that you can take action in time for the opening of the stock market.
Remember: The number of shares sated in the table refer to a sample portfolio with a starting capital of € 10000. The amount of shares that applies to you depends on your portfolio volume and must be determined by yourself. Simplified you can use a multiplier of your depot. For example: if you have € 5000, but our sample portfolio is € 10000, the factor is 2. You would get the right number of shares by dividing the number of shares in our portfolio by 2.
Important: The price of a stock serves as an indication and for calculating the performance in the sample portfolio. This is determined in real terms, although it can only be achieved directly on the stock exchange in very few cases, for two reasons: the spread and the daily trading range. The closing price, which serves as the basis for calculating the performance of the sample portfolio, may not be traded at all on the following day. It is recommended to trade from 9:30 a.m. CET for the European market and from 3:30 p.m. CET for the US market. These are the opening hours of the major stock exchanges and at these times the opening price should usually be very close to the previous day's closing price. For European products we recommend trading by 5:30 p.m. CET and for US products by 10.00 p.m. CET at the latest. Afterwards all major markets will close, decreasing liquidity and potentially increasing the spreads, so you end up paying extra.
Once you update your portfolio composition is simply time to wait. Ideally, nothing unexpected happens until the reallocation a month later. During this time Penta Trading monitors the portfolio on a daily basis. If a stock slips below a certain pre-defined level, the stock is sold or swapped within the month. In this case we will inform you immediately by email. The daily closing price is also decisive here.