3Yr·

What do you think of Gerd Kommer's opinion to increasingly rely on smart beta ETFs such as a value factor in a global ETF portfolio?

11 Comments

Sven@svenleowe

3Yr

I'm more with core satelite and picking out individual good companies. Is of course more difficult

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Barsten@Barsten

3Yr

Agree @svenleowe, a core ETF and cover individual sectors via targeted stocks; harder but more efficient in the long run.

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Zoro@RoronoaZoro

3Yr

Intel's largest position, where is @KapriolenSonne?
But seriously, what do you expect from this? Just back on the subject of fewer ETFs means more ETFs
To me, this thing looks like a classic case of self-fulfilling prophecy as an ETF...

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mano@mano

3Yr

@RoronoaZoro This ETF was just an example. It is about factor ETFs in general.

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Der Spekulant@Derspekulant1

3Yr

You're better off with a small cap.

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mano@mano

3Yr

@Daniele5991 I have it in a world portfolio anyway.

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Der Spekulant@Derspekulant1

3Yr

@mano i just do 85% acwi (msci incl. em for less cost) and 15% small cap for a bit more risk/return.

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mano@mano

3Yr

@Daniele5991 Great allocation, I do almost exactly the same. I just added an EM IMI because the ACWI share is too small for me.

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Der Spekulant@Derspekulant1

3Yr

@mano also good, 70/30 do 90% here and that really bores me. Like when you leave everything on standard settings 😂

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Paketknecht@Paketknecht

3Yr

Find the factor premiums very attractive, a 500 € savings plan on the MSCI World Momentum from 1997 to today is currently at 624,000 € (even nen tick better than S&P500), the MSCI World would have brought only 470,000 €. The worst factor was Value, so you would have only 443.000 €, but this factor also ran many years better than the normal World and only since Corona was overtaken by the world. Source, backtest.curvo.eu. My active ETF portfolio consists of 40% Momentum, 30% Value and 30% Emerging Markets.

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Alex@AlexBloch

2Yr

Kommer stands for long-term investing, i.e. for at least 20 years. Then one can also take factor ETFs into the portfolio, because in this long time any of the 5 scientifically proven main factors will strike at some point. The crux is: A certain factor can strike soon or only in 20 years. So if you use factors, you have to keep it up for decades, even when rebalancing, otherwise it is just a short term bet and speculation on certain factors. Especially if you only use 1-2 factor ETFs, you have to be prepared for years of deeper drawdowns in the meantime, deeper than with a standard world portfolio. Many then panic that they have bet on the wrong strategy and change it. You can't go more wrong than that...

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