MSCI World falls below the start of the yearInsurance and defense sector interesting again

The $IWDA (+1.3%) is now back below its value at the beginning of the year, which is probably due to Trump's announcements on punitive tariffs.

As I have a low US weighting in my portfolio, the return is much better. For the time being, the assumption that the US economy will develop rather negatively in the coming years and that international investor confidence will also decline seems to be confirmed. Europe and Canada are now working together more closely than ever before and I believe it is likely that new trade agreements beyond CETA will be concluded. These could, for example, be agreements on the supply of raw materials or weapons, which would then benefit both partners without using the USA as a mediator (as is currently the case). Public concerns about the potential threat of war are growing, which is of course particularly good for insurance companies and the arms industry. The greater the fear in society, the greater the need to insure against this fear, for example through term life, building protection, household contents or legal expenses insurance. Primary insurers such as Allianz ( $ALV (-0.01%) ) and reinsurers such as Hannover Re ( $HNR1 (+0.04%) ) and Munich Re ($MUV2 (-0.48%) ). I do not $MUV2 (-0.48%) is not in my portfolio because I don't want to overdiversify and therefore only hold Hannover Re, which has a more stable historical performance.

If there is a fear of war, people also want to protect themselves physically, which is why they are more willing to spend a larger proportion of their economic output on defense.

All of this would benefit my portfolio. With Thales ( $HO (-2.86%) ) I am up 75% since the beginning of the year. Safran ($SAF (+1.07%) ) has also gained 25%. However, I am more convinced by Thales, as they offer cyber security products/solutions in addition to military machines. We still have a lot of demand in this area and new security concepts have to be developed all the time as the old ones can suddenly be circumvented at some point. The products are therefore never fully developed, which is why innovation is always possible, enabling higher prices due to higher quality.

So my conclusion is this: I am currently cautious about US equities. The insurance and defense sector will benefit regardless of whether war actually breaks out or not and I therefore expect returns above the market average.

Oleg@ScorpionfromBW

1Mon

But you do realize that if the USA performs worse, $IWDA will also weight Europe more when rebalancing? And with your mere 20 years of age, do you have to worry about whether this will turn out well in a few decades?

•

ynnxs@ynnxs

@ScorpionfromBW I realize that, of course, but this rebalancing costs a lot in terms of returns and I would like to save myself that. I'm also simply not that convinced by the top positions in the MSCI World and these have a very large share of the ETF. I'd rather invest in the companies from the ETF that I really want to have in my portfolio 😅

••

@ynnxs You are right. But independent rebalancing requires analysis and a lot of time. Not everyone has that. Do it the way you like it. We'll see in a few years' time whether you were right

@ScorpionfromBW if you only want to invest passively then the MSCI World is certainly better. I also see it more as a hobby because I'm interested in the topic. As you said, you can only judge in a few years' time whether the strategy will ultimately give me a better return 😁

Sebi@Seebi

you are so funny 😀😀😀😀 I was out after the second sentence.

MSCI World falls below the start of the year Insurance and defense sector interesting again?