$GERD (+0,18 %) has actually achieved a return of approx. 1% more than the ACWI IMI over 1 year, exactly as predicted. (With TER additional costs of 0.3%, i.e. an outperformance of +0.7%).

I am thrilled how perfectly Gerd Kommer has put his financial theory into practice - and therefore gladly prepared to pay the slightly higher TER of 0.5% !!!!

estimated reading time: 4 minutes

Twenty years ago, the new market crash wiped out my first stock market money and my ego. I swore off the stock market, but my pension certificate showed me that ducking out has an expiry date.

So the first attempts to start again followed. Here on Getquin, I have learned from positive critical voices from e.g. @DonkeyInvestor and @Epi that there is more to it than "just picking something". Since my last post 6 months ago, this was followed by extreme late-night brooding, Excel monsters, AI research, reading Kommer and countless "new agains".

I have tried to read up on modern optimization models such as Mean-Variance, Black-Litterman and Fama-French etc. and implement them in the best possible way.

The result was this portfolio!

As thoroughly tested as you can in a private garage, and coupled with the insight that we only have to leave the uncontrollable to chance.

And one thing first. I am convinced of this and will not change it.

I just want to share my thoughts and ideas about the direction with you. It's difficult to really explain every detail here, I'm sure I could do it better in a conversation, but that's not possible here. I can assure you that the selection and combination definitely makes sense - at least for me and the construct. Among other things, it was important to me to be able to control individual regions separately. I think I have achieved that.

Global (30%)

- SPDR MSCI All Country World, $SPYY (+0,32 %)

- L&G Global Equity UCITS ETF, $LGGG (+0,49 %)

- iShares Edge MSCI World Momentum, $IS3R (+0,16 %)

- Xtrackers MSCI World Value, $XDEV (+0,03 %)

- Invesco Global Active ESG Equity, $IQSA (+0,36 %)

- VanEck World Equal Weight Screened, $TSWE (+0,14 %)

- VanEck Morningstar Developed Markets Dividend Leaders, $TDIV (+0,02 %)

USA (31.5%)

- L&G US Equity, $LGUG (+0,19 %)

- iShares MSCI USA Mid-Cap Equal Weight, $IUSF (+0,38 %)

- JPMorgan BetaBuilders US Small Cap Equity, $BBCS (-0,05 %)

- SPDR MSCI USA Small Cap Value Weighted, $ZPRV (+0,05 %)

Europe (17.5%)

- HSBC EURO STOXX 50, $H50A (-0,03 %)

- L&G Europe ex-UK Quality Dividends Equal Weight, $LDEG (-0,18 %)

- SPDR MSCI Europe Small Cap Value Weighted, $ZPRX (+0,27 %)

Emerging markets (19%)

- iShares Edge MSCI Emerging Markets Value Factor, $5MVL (+1,12 %)

- UBS LFS MSCI Emerging Markets ETF, $EMMUSA (+0,8 %)

- L&G Emerging Markets Quality Dividends Equal Weight, $LDME (-0,14 %)

- SPDR MSCI Emerging Markets Small Cap, $SPYX (+0,25 %)

Japan (2%)

- L&G Japan Equity UCITS ETF, $LGJG (+0,08 %)

Ø TER = 0.25%

In summary, this gives the following breakdown

Regional breakdown

- USA (North America) ~ 48%

- Asia ~ 22%

- Europe ~ 22%

- UK ~ 3.6%

- Japan ~ 4.4%

Market capitalization

- Large Cap ~ 52%

- Mid Cap ~ 26%

- Small Cap ~ 22%

The portfolio deliberately allocates its capital to the regions and - where possible - to all capitalization classes. The world building blocks provide the global beta; value, momentum and quality satellites add factor premiums. In the USA, a complete large/mid/small stack provides a pronounced size bias, while Europe receives a value bias via quality and small value ETFs. The emerging layer combines large-cap value stocks, quality leaders and a small-cap module - a diversification anchor beyond the developed markets.

Due to the almost equal weighting of the 18 positions, the Herfindahl index of ETF weights falls to ~633; indirectly, the portfolio contains several thousand individual stocks. The weighted TER is ≈ 0.25 % p. a., spreads below 0.1 %. This means that, compared to a $GERD (+0,18 %) a favorable multifactor portfolio myself.

The factor tilts (value 42 %, size 35 %, quality/div ≈ 12 %, momentum ≈ 8 %) increase the expected volatility moderately to 18-20 % p.a.; however, historical data on small and value indices indicate 1-2 percentage points additional return over long horizons. Large caps remain present at around 52 %, mid caps at 26 % and small caps at 22 % support the size premium .

With my "multi-factor all-cap portfolio", I combine global market coverage with five proven premiums, without cost or concentration ballast. Of course, I will have to endure additional fluctuations, but I believe that I have created a robust source of returns over the long term.

I have tried to consider everything and leave nothing to chance, except the uncontrollable.

Anyone who has made it this far. Thanks for reading.

I'm looking forward to your feedback.

PS:

YES, I have Bitcoin😉 and also two themed ETFs. They just stay like that.

- ARK AI & Robotics ETF, $AAKI (+0,23 %)

- HanETF Future of Defense ETF, $ASWC (-0,3 %)

- ETC GROUP CORE BITCOIN, $BTC1 (-3,4 %)

---

no investment advice; DYOR

Thanks also to @VPT , @Mister_ultra , @Ph1l1pp , @ShrimpTheGimp , @MoneyISnotREAL , @Staatsmann and @Smudeo for commenting and providing approaches.

What I had planned to do:

• ETF ->

Besides the $VWCE (+0,26 %) which is my largest position in the portfolio so far, the ETF's $SMEA (-0,07 %) & $AEJ (+1,11 %) with a higher savings rate.

This approach is going according to plan. Due to a significantly higher salary as a result of completing my training, I am only changing the size of the savings plan here.

I just want to achieve the same buy-in here. However, to be honest, this is only for an optical reason.

• Individual shares ->

Some shares have clearly exceeded the 10% limit.

• $AAPL (-0,29 %)

I have been saving large amounts of money in the stock itself since November 24. At least until I started thinking about portfolio management and investment strategies.

As a result, Apple was the top position in my portfolio during the slump.

It is now in second place with 20% of the portfolio. But that doesn't look so good due to the red figures.

I have set up a savings plan for this, which I pay into weekly with a small amount.

The aim is to reduce my buy-in and this has worked well so far, from over 12% down to 8% down.

• $DTE (+0,29 %)

The share has been in my portfolio for some time, but has been in the red for a long time.

I had decided to $MSFT (+0,36 %) & $SIE (+1,15 %) to sell. Both shares have generated good returns and I have been happy with them so far. So I thought "why not?".

I reinvested this money and wanted to reduce my buy-in of the Telekom share. Let's see how that goes.

I don't have much to say about the rest of the individual stocks. You can take a look at the portfolio yourself and ask any questions you may have.

• Addition

Just a few months ago, I decided to split my salary at the end of the month on a percentage basis. This means that part of it goes into the custody account, part into the vacation account and part into the reserve account.

As I said, I was never taught how to handle money. This approach didn't work out at all.

Money came in -> money was divided up -> I ran out of money -> money was transferred back.

That sucks.

The only thing I never touch is the deposit. The custody account reminds me to grow financially and what my actual goals are. In addition, there are fees when selling, or the red numbers of the course: "if I sell now I have the amount "XY" REALLY made a loss.

Hence the attempt:

To put the portion of my vacation money into the Gerd Kommer ETF every month. $GERD (+0,18 %) every month.

If the money is invested. I can't blow it. Even if the attempt fails and I go down 10%. In the end, it's still more than nothing.

In an emergency, I can also sell a single share and buy or sell it afterwards at a good price. If the timing is bad for a partial sale.

Overall, I can't get rid of the feeling that I should at least give it a try. I've been thinking about it for a while now.

I'm just still unsure whether the accumulating ETF was the wiser decision.

Thanks for reading and for your attention :)

Because I can see that some people are slowly approaching their entry level with their ETFs, here is some food for thought:

If you've always had your eye on other stocks but didn't want to sell for tax reasons, now is the chance to sell your $VWCE (+0,26 %) and invest in $GERD (+0,18 %) or one $WEBG (+0,32 %) or other ETFs that you only discovered after your savings plan has been running for a few years. 😘

actually fits very well into my multifactor portfolio. Of course I didn't buy it myself, it seems to be a promotion from the new broker I brought on board for Epi's 3x GTa4-Ramba Zamba certificate. But a single share of this (is that what ETFs are called?) suits me, I think.

Good evening,

I would like to invest a five-figure sum for my parents.

The plan was to invest in an ETF for 3-5 years, which is accumulating and has medium to low risk

Not so long ago, I came across the Kommer ETF $GERD (+0,18 %) in an article.

Now the question is, are the costs in relation to the risk, at 0.5% they are no bargain ?!

The other option would be a portfolio with several ETFs.

An MSCI World with associated EM would not be the favorite, at least not in the classic style.

Thank you very much👍

LG Mark

Dear community,

I have been a member of getquin for almost 2 months now and I am thrilled with how lively the discussions and contributions are. Thanks to everyone who takes the time to research certain topics and share their knowledge.

I would like to take the opportunity to briefly introduce my portfolio and share my thoughts for 2025.

I have been managing my own investments for 10 years now. I started with ETFs and got into cryptos in 2017 (and got out again after the FTX bankruptcy and the Terra Luna crash). And for a few years now I've also been trading shares and now also real assets (I'm currently testing Timeless). Over the years, I have been able to expand my portfolio.

Due to my family responsibilities, my monthly fixed savings rate is currently €500. I also park monthly surpluses in my call money account and invest them when I see an opportunity. I need a certain amount of cash as we are still renovating and therefore simply need some cash...

My goal is to have at least €500,000 in 10 years so that I can pay off the existing loans on our house. So I would need to generate an annual return of 15%...

Over time, I've built up quite a mix of shares. My credo so far has been not to invest more than €1000 per share (although there have been exceptions) and a stop-loss at 20% below the purchase price. I haven't decided when the best time to sell is and I still don't know which strategy is best for me. I would therefore describe myself more as a hodler...

Now to my plans for 2025.

- I will change the fixed value per share of €1000 and increase it to €5000.

- The stop loss remains in place.

- Keep savings rates at €500 for the time being.

- Reduce the number of shares

- Focus on growth

What could a savings plan look like that I would continue for the next few years?

One point that bothers me is the high proportion of US equities in the global ETFs (cluster risk) - even though this is where most returns have been made historically...

Hence my consideration:

- Save in an ETF with a lower or no USA share (I currently have the following in my portfolio $GERD (+0,18 %) where the USA share is only 50% - unfortunately quite expensive with TER 0.5%; or a new start with a $EXUS (-0,01 %) ) (share: 40%)

- Saving $MEUD (-0,07 %) (20 %), $FLXI (+0,5 %) (20%), $WSML (+0,14 %) (20%)

- S&P500 or MSCI USA via the 2xSPYTIPS of @Epi (via single payments)

- In addition $BTC (+0,15 %) Savings plan of 40€ / week from existing USDC holdings (LTC sales from December) Note: Crypto portfolio cannot be fully mapped in Getquin as the EARN Binance Wallet is not displayed.

What do you think? Does that make sense?

As a next step, am I considering divesting from stocks?

From $OBDC (+0,22 %) I would probably divest myself, possibly also $CSCO (+0,36 %) . Can you think of any other shares or ETFs that would make sense to sell due to low growth prospects? I would then invest the free money in 3xGtaaa and shares like $ASML (-0,65 %) , $NVDA (-0,35 %) ...

Overall, I'm still not sure whether my strategy is quite right. Do you have any ideas, suggestions or comments? I would be grateful for any advice.

Thank you and best regards

Disclaimer: No investment advice or recommendation, this article is for information purposes only. Before you decide on an ETF, take a closer look at it in terms of positions, sampling, regions, etc. I can't describe everything here as it would go beyond the scope of this article.

Part 1 (Definition, Categories

& Z-score and quality factor): https://getqu.in/RCSY4a/

Part 2 (Value ETF): https://getqu.in/Nfnhqb/

Part 3 (Low Volatility ETF): https://getqu.in/Ub7KpG/

Part 4 (Momentum ETF): https://getqu.in/CNMgGw

Part 5 (Small- and Growth ETF): https://getqu.in/0NoqmW/

Part 6 (Dividend ETF): https://getqu.in/NJtoF5/

What are multi-factor ETFs?

As the name suggests, multi-factor ETFs contain several tilts and are therefore not pure plays on certain factors. The theoretical foundation here is also the CAPM/French Fama model, according to which the expected stock return is expressed by premiums: Volatility, Size & Value. Multi-factor ETFs use several of these factors to outperform their respective parent index (or to achieve low risk). By combining different factors, this form of ETF is more active than the smart beta factors previously considered.

Historical returns

It is not really possible to say whether outperformance can really be achieved due to the limited data currently available. Many of these ETFs have only been around for a few years. A comprehensive study of multi-factor ETFs to date concludes that multi-factor ETFs have underperformed both the US and global markets (while down-side protection paints a mixed picture). Study:

https://pmc.ncbi.nlm.nih.gov/articles/PMC10225753/

However, in my opinion, no general conclusion can be drawn here, as we have already seen in previous parts that the individual factors such as size, volatility and dividends have underperformed in the recent past. It is therefore only logical that the multi-factor approach has also underperformed in the recent past.

👉Multifactor-ETFs:

$HWWA (-0,1 %) (World | TER 0.25 % | TD n.A. | 1.3 bn Invested Vol. | 3Y underperformance vs. All-World -0.2% ppt. | 5Y underperformance -0.2%pt. | 10Y underperformance -14 %pt.)

Index methodology: Relevant stocks are identified from the parent index (MSCI All Country World Index) using the following factor weightings:

(1) Value: low kgv/kbv , high dividend yield is preferred

(2) Quality: stable earnings high return on equity

(3) Momentum: shares that have shown above-average price performance in the recent past are preferred

(4) Low risk: stocks with lower volatility than the overall market are preferred

(5) Size: Smaller companies (small caps) with potential for above-average growth are preferred.

• The fund may invest up to 10% of its assets in derivatives such as total return swaps and contracts for difference.

$IBCZ (+0,31 %) (World | TER 0.50 % | TD 0.31 %.| EUR 0.5 bn invested. | 3Y underperformance vs. All-World - 4%pt. | 5Y underperformance - 11 %pt | 10Y underperformance - 34%pt.)

• Index methodology: Focus on Value, Momentum, Quality & Size (Small Cap). The aim is to achieve a similar risk profile to the All-World. The factors are weighted and risk rated using MSCI's "Barra Equity Model". This uses over 40 data metrics for each share and provides a value-at-risk figure for each share, among other things. The focus factors are used to determine a weighting for the positions, which are then adjusted on the basis of risk measures, e.g. country and sector weightings may not deviate from the starting index by more than 5%.

$GERD (+0,18 %) (World | TER 0.5 % | TD n.a. | 0.4 bn invested vol. | 1Y underperformance vs. All-World -5%pt.)

• Index methodology: Gerd Kommer's index should not be omitted here for reasons of respect for his performance alone. In addition to size, momentum, value & quality, country weightings of 50% by GDP and 50% by market capitalization are also applied here, as well as minor gimmicks such as the exclusion of stocks around the IPO period and in the case of high short interest. Dedicated analysis: https://www.youtube.com/watch?v=3IWp5OHn4Ps

$FEX (US | TER 0.65 % | TD n.a. | EUR 0.2 bn invested volume | 3Y underperformance vs. S&P 500 - 13 %pt. | 5Y underperformance - 30 %pt. | 10Y underperformance vs. S&P 500 - 134 %pt.)

• Index Methodology: Mix of growth and value factors. Growth factors: Momentum (3, 6 & 12 month price increases), sales multiple, 1 year sales growth. Value factors: Price to book ratio, cash flow to price ratio, return on equity. Valuation of shares from the parent index (Nasdaq US Large Cap 500) based on these factors, allocation & weighting according to quintiles, top quintile approx. 33% weighting, 2nd quintile 27%, etc. Quarterly reweighting

$IBC0 (-0,08 %) (Europe | TER 0.45 % | TD 0.22 % | EUR 0.2 bn invest vol. | 3Y outperformance vs. EuroStoxx 600 + 2%pt. | 5Y outperformance + 6 %pt. | 10Y outperformance + 8 %pt.)

• Index methodology: the "Barra Equity Model" is used to select a factor from the parent index (MSCI Europe Index for large and mid-caps) via the factors: value, momentum, quality

Conclusion - what remains?

Multi-factor ETFs try to achieve an edge over the parent index by combining various factors, true to the motto: a lot helps a lot, the shares are screened according to various factors such as size, value, momentum etc. in order to achieve a higher return with the same or lower quality with this "egg-laying wool-milk sow". However, precisely this complexity can also be a disadvantage, as screening according to many factors can mean that some factors influence each other and are therefore not as highly weighted in the index.

Unfortunately, the data is not yet sufficient to make a statement about the investment case of these multi-factor ETFs, but the short-term returns over the past 10 years have lagged behind those of the parent indices (as the individual factors have often performed worse).

#smartbeta
#multifactor
#etf

$GERD (+0,18 %)

Hello everyone, what do you think of the Gerd Kommer ETF? Would you invest in it? Do you think the TER of 0.5% is too high? And are there alternative ETFs that are so globally diversified and have such a balanced weighting?

The $GERD (+0,18 %) still has to go into the deep dive!