5J·

Refurbished and finally found the base

A lot of time has passed since my introduction over a month ago and the one or other post. I was not satisfied with my smorgasbord and have once again taken a serious and intensive look at the subject of the stock market.

Thoughts, suggestions from some nice people here on GQ and also posts https://getqu.in/WB1phr/ have really helped me here.

Thank you for that. @DonkeyInvestor , @Mister_ultra , @Epi , @Ph1l1pp , @ShrimpTheGimp , @MoneyISnotREAL , @Staatsmann

After the introductory words, now to the presentation of my portfolio.

I have finally decided on a strategy that I find suitable for me. The core-satellite strategy. Investment period 20 years.

I will gradually reallocate my previous investments and save an additional 600 euros per month in the portfolio.

For me, the decisive point here was that I continuously build up the "core" and use the satellites to pursue my "ideas" and also generate dividend income.

The percentage allocation of the investments to my individual satellites was based on the average return over the last 10 years.

Core (60%)

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HSBC MSCI World UCITS ETF - $HMWS (+0,45 %) - Share 60.0%

Satellites (40%)

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HSBC MSCI Taiwan Capped UCITS ETF - $HTWN (+0,14 %) - Share 4.9%

Xtrackers Euro Stoxx 50 UCITS ETF - $XESX (+0,32 %) - Share 2.4%

Invesco Technology S&P US Select Sector UCITS ETF - $XLKS (+1,58 %) - Share 7.8%

Xtrackers Artificial Intelligence and Big Data UCITS ETF - $XAIX (+0,91 %) - 7,0%

iShares MSCI World Energy Sector ETF - $WENS (-0,31 %) - Share 4.2%

Global X Defense Tech UCITS ETF - $ARMG (+0,68 %) - Share 3.6%

EUWAX Gold II - $EWG2 (+0,59 %) - Share 3.0%

Bitwise MSCI Digital Assets Select 20 ETP - $DA20 (-0,01 %) - Share 7.0%

Notes on the satellites:

An MSCI Emerging Markets would be a suitable addition to the core MSCI World. As most emerging markets ETFs rate China quite highly, but I am not convinced of this, I have picked Taiwan and chosen the MSCI index there. $HTWN (+0,14 %)

Technology $XLKS (+1,58 %) and AI $XAIX (+0,91 %) are still markets which, in my opinion, have a lot of potential. These two areas are also the reason why I invest in energy $WENS (-0,31 %) because the energy demand for AI, cloud, etc. is high.

I still see defense as a trend and have finally opted for the Global X Defense Tech $ARMG (+0,68 %) final decision. In my previous post on this, I was more interested in the HANetf Future of Defense $ASWC (+0,44 %) . As the European investment volume of the two ETFs (HanETF = 29.38%, Global X = 28.08%) is almost the same, but the Global X $ARMG (+0,68 %) invests more in the market leaders (Lockheed $LMT (+0,27 %) Northrop $NOC (+0,18 %)General Dynamics $GD (+0,02 %) etc.), it has now been included in the final selection.

I cover the currency sector with EUWAX Gold II $EWG2 (+0,59 %) and Bitwise MSCI Digital Assets Select 20 $DA20 (-0,01 %) . As you have seen from my previous posts, I am reluctant to invest in crypto. That's why it's "only" the Bitwise MSCI Digital Assets Select 20 ETP. This ETP tracks the 20 leading investable crypto assets and is therefore effectively the "MSCI World" for the crypto market.

PS: I have adjusted the crypto ETP slightly downwards in the percentage distribution with a minus of 50%.

downwards. If anyone actually looks at the table, -50% in 2022 is inserted by MIR for regulatory purposes 😉

I look forward to your feedback.

Best regards

Daniel

26 Commentaires

Kevin@VPT

Hey, it's great that you're dealing with these issues so intensively.

You don't need to say much about the core, it fits.

The satellites reflect the current trend, where nobody knows what will happen tomorrow.

Without knowing the exact fact sheets, my problem with sector ETFs in general is that often only a "few" strong companies emerge as market leaders in the long term and the rest are in danger of underperforming, but who knows 🔮

Otherwise, ETFs are highly susceptible to political and economic regulation.

The portfolio would be too complex for me personally, what is your plan in terms of balancing?

In terms of the risk/reward ratio, I would probably prefer to forego some potential returns and part with some sector ETFs.

As soon as some sectors in the world ETF outperform, they automatically take up a larger share of the index. This will be clearly noticeable if the trend/sector is actually the same as in your investment period of 20 years. You will also participate in the trend, not as strongly as with a pure sector ETF, but certainly above average. On the other hand, you are more secure in the event that the sector does not outperform in the next 20 years and another sector takes its place. That's why I'm a fan of the pure World, ACWI.

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Daniel@Bidax

@VPT Hello Kevin,
Thank you very much for your really detailed comment.

Just to define it again as a question. The way I've set it up, it shouldn't be so wrong, should it?

The satellites I chose are indeed highly susceptible to global politics and market trends. I completely agree with you. But it also reflects the current market (yield). I actually thought I had kept the complexity within limits. At the moment, I'm glad that I've found a way to invest my money. I have portfolio rebalancing on my radar. However, to be honest, I have to admit that I haven't given it any thought yet, as I'm just starting out with the "new" portfolio and trying to follow tendencies and trends. I don't want to change anything for the time being, provided the framework conditions allow it. Just let it run its course. The last few weeks have cost me a lot of sleep and nerves, as I've been working my way into the matter and trying to find my own way.

During my investment period, I will certainly be changing my satellites. The core remains and that's the most important thing.

For me, I can't imagine having just one MSCI World, FTSE-All World or MSCI ACWI.

Thank you for your feedback and good returns and success on the stock market to you too.

Daniel

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Kevin@VPT

@Bidax not wrong... you could say that. The most important thing is to get started. Even if you start like this now, you will certainly change your strategy many times over the next few years.

The comment on the satellites from @DonkeyInvestor complements my opinion on the satellites and sums it up pretty well.

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Daniel@Bidax

@VPT and @DonkeyInvestor: I'm really glad that I brought this up for discussion again. Apparently I need to rethink my "refurbished" portfolio again.

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Nostradonkey💩@DonkeyInvestor

@Bidax Please start first and learn in practice. That way you'll get a feel for it and learn as you go. It may cost a bit of money (or not) but it's a thousand times better than listening to strangers on the internet all the time

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Nostradonkey💩@DonkeyInvestor

Glad you've found a plan that suits you 👍

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Daniel@Bidax

@DonkeyInvestor Thank you for your help and support. Unfortunately, there is no one in my family that I could ask for advice. I am really grateful to you and the GQ community.

I currently feel very comfortable with it and yet. I would like to get your honest opinion on my "refurbished" portfolio. Before I start regrouping... 😂

I've made a real effort with Excel and visual preparation to implement my ideas with sound research. I hope you can see that. Above all, I have to stop thinking about it now, otherwise my wife will kill me. Because then we won't need to talk about investment horizons any more.... 😉

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Nostradonkey💩@DonkeyInvestor

@Bidax Gold is weighted too low to have an effect. The sector ETFs are thematically too narrow for me. Taiwan is also very small and not risk-free. If you actually want EM, you should also put EM in your portfolio and not Taiwan. I don't know the crypto ETF, but with Top20 you are definitely buying a lot of pump & dump. It could be that the ETF is lagging behind.

You can of course leave the core as it is. Personally, I would of course set up the satellites as you find them in my portfolio 😁. To stay closer to your suggestion, I would put the 40% of the satellites in

10% gold
15% Momentum ETF
15% Quality ETF or Div Growth ETF

swap. At the same time, you should look into crypto and if you come to the conclusion that you want crypto in your portfolio, add 10% (and reduce quality / momentum by 5%). But then primarily invest directly in $BTC and if you really want to add other coins, invest in them directly.

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Nostradonkey💩@DonkeyInvestor

@Bidax Alternatively, dive quality or momentum against EM

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Daniel@Bidax

@DonkeyInvestor Quality ETFs tells me something. I didn't have the topic of momentum on my radar yet. But I have a question. I have just briefly read up on the momentum principle. Since I already use the "normal" MSCI World as a core. Wouldn't that overlap too much with the MSCI World Momentum Factor?

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Nostradonkey💩@DonkeyInvestor

@Bidax no. I have Momentum and Quality in my bAV (not tracked here).

Beat the MSCI World in the long term (>= 30 years) without any effort.

World vs. World Momentum Index
https://getqu.in/CDEnfS/

World vs. World Quality Index
https://getqu.in/HhbBYl/

World vs. World Value Index (+ conclusion)
https://getqu.in/TD3OT2/

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Mister_ultra@Mister_ultra

You've definitely given it some thought.

Your satellites really speak to a momentum strategy:
"What's worked in the last few years will work in the future"

One third of the MSCI Taiwan consists of TSMC $TSM - you could also consider jumping straight in here.

Regarding the basket of cryptos. I don't know too much about it, but I gambled with smaller coins several times before giving up and only betting on Bitcoin and Ethereum.

Gold at 3% would be fine for me. I have virtually no gold in my portfolio. Not even 1%

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Testo-Investor@Testo-Investor

Where is Bitcoin?

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Daniel@Bidax

@Testo-Investor 🫣 im $DA20

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Testo-Investor@Testo-Investor

@Bidax I'm talking about real Bitcoin and not that shit 😂

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Daniel@Bidax

@Testo-Investor 😘 That's all I dare do. I come from a time when there were still dials on the phone 📞 😅

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Filipe@fpena

Thanks for sharing your plan.
I am a bit against sectors ETFs... believe most of them don't bet the market. As you have already, keep using the World ETF and maybe add a general world info tech etf and you are covered. Gold, yes. Add some individual stocks from other markets or sectors that you believe to compensate in overall weight (like some defense stocks, energy, or particular stock from japan or europe).

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Daniel@Bidax

@fpena Thank you for your comment. I see the advantage of a core-satellite portfolio precisely in the fact that you can use certain themes, sectors or other asset classes to try to improve performance and realize ideas. At the same time solid base. Regarding your comment about technology ETFs, I can only say that I have already done this. In the comparison period from October 2019 to January 2025, the Invesco Technology S&P US Select Sector UCITS ETF $XLKS i chose performed 57% better than the MSCI World Information Technology index you suggested. The additions you suggested from other markets and sectors are already included: Taiwan, Europe, Defense and Energy. Thank you for your feedback, but what you suggested as an improvement I have actually already implemented.

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JCM@TheStoic

Is there a reason why you chose the distribution exactly as you did? It seems a bit thrown together to me. Gold in particular can prevent drawdowns with an appropriate portfolio share, but at 3% it certainly shouldn't make a big difference in the portfolio and even if it has done well recently, gold is not necessarily a growth factor, so I don't necessarily understand the addition in this ratio. (Perhaps @Epi can also write something about this. I think he once published a great article in which he analyzed empirical data to determine the optimal proportion of gold in order to prevent major drawdowns, for example).

Otherwise, I would run some backtests on the portfolio, you may be able to optimize your distribution.

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Daniel@Bidax

@TheStoic Hi, there is indeed a reason. I tried to show it in the second picture. 60% core and (30+10) with the satellites. Whereby 30% was allocated to equity ETFs and the rest in currencies. I found it conclusive for me. Perhaps you can better understand my idea behind it if you take a look at the Excel image.

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Epi@Epi

@Bidax I would agree with @TheStoic, the weightings still seem a bit random. What criterion did you use to weight 60-30-10? Max Sharpe ratio? Min Max Drawdown? Min Vola? Max gut feeling?

Your table is an important first step towards a backtest. But it is still incomplete and should go back at least to 2007 so that you can see how your allocation performs in a crisis. And what conclusions do you draw from the table? Tip: give the table to ChatGPT and ask him about the optimal weighting of the asset classes - you'll be surprised how he approaches it and what comes out! 😁👍

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Daniel@Bidax

@Epi How do I do that? Give ChatGPT the table? Serious question 🫣

Edit: GIDF... got it

Sorry

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Epi@Epi

@Bidax I think you can just upload it as an attachment. It might be enough if you give him the list of ETFs. It will already fetch the table data.

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Daniel@Bidax

@Epi I'll do it. Thank you. But I'm really starting to despair, because I was really sure that I had put my brain into the whole thing.

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Epi@Epi

@Bidax It wasn't for nothing. Excess returns have to be earned. Where else would it come from? 😁

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Uwe@SchlaubiSchlumpf

Like many, I am not a fan of sector ETFs. They usually chase returns and then don't perform all that well. If you want momentum, you can take momentum.
If you also want to have a real effect from saddles, they have to be big enough to make a difference. With a bit of bad luck, a satellite conglomerate can act more like a yield anchor.

But that's just my own view. Ultimately, you should be able to satisfactorily justify why you are invested. In my view, the best way to do this is based on facts and not just on what has gone well over the last 10 years.

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