3D·

Major Restructuring

I finally reallocated a large sum—I had just under €1,500 in my savings account earning a mere 0.001% interest, which is obviously a joke. A few days ago, I moved the entire amount to the $GERD (-1.07%) to get more out of the money

15.07

L&G Gerd Kommer Multifactor Eq ETF

Bought x75 at €15.02

€1,126.50

12 Comments

Fred@Fred999

It's more expensive than an All World ETF but offers the same performance—what made you choose this particular ETF?

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JojoPJ@Jojo585

@Fred999 perhaps the stock weightings in this ETF

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Uwe Geller@SchlaubiSchlumpf

@Fred999 $GERD 's strategy is designed for very long time horizons. In 10 to 20 years, we'll see if it's/was a wise move.

I tend to be on the skeptical side, even though I think the idea of ETFs is a good one.

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Alex@AlexBloch

@Fred999 What does “same performance” mean? Over 1 day, 1 week, 1 month, 1 year, 3 years, 5 years?

The GERD is designed for a holding period of at least 5–10 years, and will ultimately outperform every All-Word fund. Because it incorporates the latest findings from financial research.

Even though that hasn’t worked out over the past 2 years:
The AI bubble will burst, and with it, the current outperformance of all All-Word ETFs...

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Alex@AlexBloch

@Jojo585 ....und vor allem serielles Factor-Investing !

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Gainzilla@Gainzilla

@Fred999 What convinced me was the weighting—take a look at the MSCI; it’s 60% U.S. Gerd Kommer’s portfolio is just under 45% U.S. and includes small-cap stocks, which means I don’t have to rebalance it myself and I also pay lower fees with my savings plan.

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Alex@AlexBloch

@Gainzilla But that's not all—there are many more benefits you'll enjoy:
https://gerd-kommer.de/etf/vergleich/

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GHF@GHF

@AlexBloch If the marketing department says so, then it must be true. 🤷‍♂️

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Gainzilla@Gainzilla

@AlexBloch That just shows me even more why I'm glad I chose the ETF, even though it's a little more expensive.

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Uwe Geller@SchlaubiSchlumpf

@AlexBloch Hmm, I see the biggest advantage in factor investing with a multi-factor approach. The GDP weighting and the 1% cap are listed as advantages, but they don’t necessarily have to be. Above all, this is likely to increase the proportion of small- and mid-cap stocks. Possibly also value stocks. Both of which are considered a premium. Especially when combined. The $GERD should already have that, though, thanks to its multi-factor approach. The U.S. weighting also decreases if, for example, I overweight value with the $XDEV. If I then add an EM ETF, I end up below 45% U.S.

Even the 300 additional stocks compared to the $SPYI don’t automatically help. Historically, for example, small-cap growth stocks have, on average, underperformed value stocks. So if I were to target the 300 most growth-heavy stocks (growth in the sense of a high debt-to-equity ratio) to generate excess returns, I would do so.

I don’t know how Gerd manages to include those 300 additional stocks. It’s possible that what I said doesn’t apply there. But I don’t know. All I’m trying to say is: all of this could be an advantage, but it doesn’t have to be. And in some cases, perhaps not for the reasons mentioned.

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Alex@AlexBloch

@SchlaubiSchlumpf You can't manually replicate his factor investing. That's because Kommer's algorithm applies it "serially" to each individual stock before it's selected for purchase. There’s a great deal of intelligence and innovation behind it—something even the major providers of standard factor ETFs, such as iShares, can’t quite pull off.
And because this boosts returns, the slight premium in fees is completely justified and fair...
The Kommer ETF is also the perfect ETF for a new retirement portfolio! Just add a European government bond ETF with a 1–3-year short-term duration, and you’ve got the perfect retirement plan!

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