1Mon·

MSCI World with or without momentum?

I am trying to organize my portfolio more clearly and combine several ETFs/funds with the same investment focus, as long as taxes are not too high when I sell them. I now have the pure MSCI World ETF $LWCR (+0.46%) and at the same time the MSCI World ETF of roughly the same size with Momentum $XDEM (+0.94%) . Which of the two would you liquidate? The momentum idea is good, but if you only change stocks every 6 months, the momentum may be long gone in between and you are betting on stocks on the decline. Thank you for your help!

11 Comments

Wealth-Accelerator@Wealth-Accelerator

1Mon

In my opinion, the momentum ETFs work less well.
I would save the "normal" one as a core. And if you are interested in momentum, take a look at the two strategies from @Epi and @Krush82. Maybe one of them will appeal to you for a 5-10% satellite.

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View all 4 further answers

ichmussweg@ichmussweg

1Mon

Aren't you paying unnecessary profits if you simplify now, i.e. sell a position?

In my experience, momentum has at least recently been justified and has clearly outperformed. But it is also likely to underperform in a crash.

https://www.interactivebrokers.com/campus/ibkr-quant-news/momentum-factor-investing-evidence-and-evolution/

I would see momentum as a factor in the portfolio, just as small/value or quality also have their justification.

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Uwe@SchlaubiSchlumpf

1Mon

@ichmussweg Momentum can be left in, in my opinion. It's not a must, but it's not a fundamentally bad idea as long as you don't overdo it. However, you should familiarize yourself with the background of the factors. Otherwise there is a risk of exiting at some point due to several years of underperformance.

If you don't want that, a msci world or ACWI is a good idea.

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Chris@IronEagle

1Mon

Many thanks for the tips on implementing the momentum strategy. However, I wanted to spare my nerves again and try to take out some volatility, even if extreme increases in value can of course be achieved through the leverage effect - but also in the other direction. I will then stick with the "normal" MSCI World or possibly sell both and take the FTSE Allworld.

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Olli@Olli68

1Mon

I would keep the normal MSCI World and sell the Momentum.
I would play momentum with equities or with a corresponding wikifolio. @Krush82 The momentum wikifolio will soon be investable. Would be a good addition to the normal world ETF.

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Krush82@Krush82

1Mon

@Olli68 that would be the S&P 500 Momentum ETF on steroids, so to speak :-)

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market_analyst_rxwez@market_analyst_rxwez

1Mon

According to Andreas Beck, the momentum strategy does not really work (source: https://www.youtube.com/watch?v=YB--TtMcsVE). However, the video also mentions alternatives that are easy to implement with just a few ETFs. For me, this is definitely the better choice for a diversified portfolio.

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