Hello everyone,

My name is Antonio, I'm almost 27 years old and I'm from Bremen. I currently work as a train manager at Deutsche Bahn. Anyone who knows the job knows that chaos is almost guaranteed here. If a train is on time, everyone wonders what's going wrong. Delays, strikes, unforeseen events - you get used to the fact that nothing goes as expected. And that's exactly how I felt on the stock market: constantly chasing hypes, always on the lookout for quick profits, and in the end I never knew whether the train was still on the right track. I experienced just as much chaos on the markets as I did in my day-to-day work - but fortunately I've learned from it and am now looking for a fresh start where everything is a bit more orderly and predictable.

I've made a lot of mistakes on the stock market in the past. And not too few - unfortunately. Like many of you, I had the idea that the stock market would make me a quick buck. I let myself be led by hypes, trends and the desire for immediate results. I wasn't interested in investing for the long term or building a solid foundation for the future, I was only ever interested in making a quick profit. Leveraged products, knock-out certificates - it was all there. It felt like a casino where the loss was usually the only "win". And so it came as it had to: I not only lost money, but also confidence in my own decisions and the markets.

But today, in 2025, I have realized that it is time for a fresh start. I have learned from my mistakes. It's been a long road and I've thought a lot about why I was so quick to go for the quick buck instead of investing patiently and focusing on long-term success. I learned the lessons I needed to become a better investor. Patience, diversification and a long-term perspective are now my principles. I want to create something tangible, not just a portfolio full of numbers, but also a solid, long-term strategy that will help me to continuously build my wealth.

My portfolio: A solid foundation

The portfolio I have now built up is a mix of different asset classes and asset classes. My aim is to diversify broadly and not miss out on potential growth opportunities, while spreading risk across different sectors and regions. Here is an overview of what my investment strategy looks like:

ETFs (€1000/month)

I have deliberately opted for a broad diversification and invested in different geographical regions and markets. This diversification should ensure that my capital benefits from the markets that have the greatest potential in the coming decades.

- IE00BMTX1Y45 ( $I500) (-5,3%)

- LU0908500753 ( $MEUD (-5,66%) )

- IE00BYXVGY31 ( $FUSA (-4,98%) )

- IE00BD1F4M44 ( $IUVF (-5,82%) )

- IE00BKM4GZ66 ( $EIMI (-4,57%) )

- LU1681041973 ( $CD9 (-5,43%) )

- LU0486851024 ( $D5BL (-6,47%) )

- IE00BYQCZN58 ( $DXJZ (-4,63%) )

- IE00BF4RFH31 ( $WSML (-4,27%) )

- IE00BG0SKF03 ( $5MVL (-4,84%) )

- IE00B652H904 ( $SEDY (-3,96%) )

- LU2089238385 ( $PRAJ (-3,5%) )

- DE000A0H0744 ( $EXXW (-5,46%) )

- IE00BFXR5W90 ( $LGAG (-6,75%) )

- LU0779800910 ( $XCHA (-3,45%) )

- HANetf Future of Defense UCITS ETF ($ASWC (-8,84%) )

So many ETFs? Does he still have all his wits about him?

Some people will think exactly that when they look at my ETF list. And yes, I admit that the portfolio is pretty broadly based - perhaps too broad for some. But that's exactly my goal. I don't want to catch the one sector or the one region that is going through the roof. I want to have everything! If a market explodes somewhere in the world, then I want to be there. Be it through large caps, small caps, growth, value, technology or emerging markets, my approach is not to miss out on potential opportunities and at the same time not to put all my eggs in one basket. Some call it overdiversification, I call it my personal "all-world approach"

The idea behind the selection of these ETFs is that I want to focus on global markets and growth regions without missing out on important sectors such as technology, healthcare and energy. The USA (with over 55% of my portfolio) remains the central component due to its economic importance and innovative strength. At the same time, I am also focusing on Europe, Asia, China and emerging markets, which are increasingly among the growth markets of the future. Small caps also play a key role for me, as they often have the potential to grow faster and offer opportunities that are often overlooked by the large institutions.

Cryptocurrencies (€100/month in Bitcoin ( $BTC (-0,04%) ) €50/month in Ethereum ($ETH) (+0,19%)

I also invest in Bitcoin and Ethereum as I am convinced of the future of these digital currencies. Even if the volatility is high, I see the long-term potential of these technologies. For me, it is an opportunity to participate in the development of a new financial world.

Gold (50 €/month EUWAX Gold ($DE000EWG0LD1 (-0,32%) )

In uncertain times, I have realized how important it is to have conservative assets such as gold. The last few years of inflation and economic fluctuations have made me realize that gold can have a stabilizing effect, especially in times of crisis.

Individual stocks - My dividend strategy

I have also selected a few individual stocks that should not only offer me security, but also regular income through dividends. The reason for this is simple: I need something tangible, something visible. It's not just the pleasure of seeing the portfolio grow, but also the dividend that gives me the feeling of actively participating in the companies and benefiting from their success.

- 3M Co ($MMM (-8,14%) )

- Allianz ($ALV (-8,43%) )

- BioNTech ($BNTX (-3,55%) )

- Booking Holdings( $BKNG (-2,79%) )

- Coca-Cola ($KO (-3,58%) )

- LVMH ($MC (-4,14%) )

- MSCI Inc ($MSCI (-6,26%) )

- NextEra Energy($NEE (-5,91%) )

- Philip Morris ($PM (-5,99%) )

- Realty Income($O (-2,42%) )

BioNTech in particular, as a company that has promising potential not only during the pandemic but also beyond, is a long-term winner for me. Likewise NextEra Energy, which plays a key role in the renewable energy sector, and Booking Holdings, which should benefit from the global tourism trend. These companies not only pay dividends, but also show that you can benefit from a company's success with a long-term perspective.

Pension fund

I also invest in the DEVK pension fund (DE000A2PT1X3) through my employer $DE000A2PT1X3 . This fund is particularly important to me because of the generous contributions made by my employer and the solid returns. Even though the costs are somewhat higher, I see it as a long-term addition to my strategy.

Why this portfolio?

I built my portfolio this way because I believe in the potential of long-term global diversification. Rather than chasing short-term gains, I am looking for continuous value growth over many years. I want to support the right companies, benefit from promising markets and at the same time have a regular source of income through dividends.

I am no longer interested in making a quick buck. I have learned that true success in wealth accumulation lies in patience. And that's what it's all about: I want to create a solid foundation for the future - for myself, for my pension and perhaps for a house in a few years' time.

What do you think?

I'm really looking forward to hearing from you. What do you think of my strategy? Do you see any areas where I could diversify even more? Are there any asset classes or ETFs missing from my portfolio that would make sense for me? I am very keen to hear your opinions and advice.

Thank you for taking the time to read my story and strategy! I look forward to your feedback.

Best regards,

Antonio

Smart Beta ETF

Part 2 - Deep f***ing Value

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/

💡 Value ETF

Focus on shares that are (undervalued) as attractive from a fundamental perspective. Valuation benchmarks here can be, for example, cash flow in relation to book value or P/E ratio, price to book value, etc. In contrast to momentum or growth ETFs, for example, they have a more fundamentally supported valuation. In theory, there should be a "value premium" for these shares, which is based on the study by Fama and French, according to which differences in returns between shares can also be explained by size and value factors in addition to the classic beta factor.

👉 Interest rate dependency

This also means that value stocks should tend to outperform growth stocks in times of sharp interest rate increases (or the expectation of such increases).

This can also be seen in a direct comparison of $IWVL, $WSML, $IS3R. In the period 2022-2023, the $IWVL outperformed the other two by 13% and 16% respectively. However, it can also be seen that in anticipation of an interest rate cut, Growth & Momentum strongly outperform the Value ETF (Fig. 1).

👉 Correlation/beta

The correlation of value ETFs to their "parent indices", i.e. World Value to Value, for example, is around 0.9. This means that, in simplified terms, the value ETF is only 90% as volatile as its parent index, i.e. it is less volatile. Weak market phases can therefore be easily mitigated

👉ETFs:

👉Z-Score MSCI Value ETF

There are 4 larger ETFs that are the same in terms of methodology but focus on different regions (TD = tracking difference):

• $IWVL (-4,98%) (World | TER 0.30 % | TD -0.02 % | 3.5 bn Investv. | 3Y Underperf. vs. World - 2,1 %.)
• $IUVF (-5,82%) (USA | TER 0.20 % | TD -0.24 % | 1.7 bn | 3Y Underperf. vs. S&P 500 - 19,5 %.)
• $XDEV (-5,26%) (World | TER 0.25 % | TD -0.09 % | 1.7 bn | 3Y Underperf. vs. world - 1,7 %.)
• $IEFV (-6,75%) (Europe | TER 0.25 % | TD -0.20 % | 1.4 bn | 3Y Outperf. vs. Eurostoxx 600 -+6,4 %).

💡 Index methodology:

• The ETFs are based on respective "parent indices", e.g. the MSCI World.
• In the first step, the variables are named for the value ETF:
• Expected earnings per share (price-earnings ratio)
• Price-to-book value (price-to-book value ratio)
• Equity value / cash flow from operations (unlevered equity / operating cash inflow)
• For each share, the Z-value (see first article) is determined for the individual key figures
• Extreme values are then eliminated
• The Z-values are then added together for each share
• The shares with the highest total Z-scores are included in the ETF
• Rebalancing takes place every six months (May & November)

👉 Ossiam Shiller Barclays CAPE

• 
  $216361 (-4,09%) (US | TER 0.65 % | TD 0.66 % | 2.5 bn | 3Y Underperf. vs. S&P 500 -3,35 %)
• $CAPE (-4,85%) (Europe | TER 0.65 % | TD 0.64 | 0.2 bn | 3Y Outperf. vs. Eurostoxx 600 1,2 %)

💡 Index methodology:

• Based on the Cyclically Adjusted PE Ratio (CAPE Ratio) developed by Shiller
• The equity market, e.g. the US market, is divided into sectors (in this case 11) and the respective sector price earnings are determined. The inflation-adjusted (10-year) sector profits are used for this purpose
• A CAPE ratio is then calculated monthly for each sector and this is set in relation to the 20-year average for the sector.
• The 5 sectors with the lowest relative CAPE ratio are selected, as these are considered undervalued
• From these 5, the sector with the weakest 12-month price momentum is filtered out to avoid "value traps"
• The remaining 4 sectors are then weighted at 25%.

Conclusion Value:

The value premium was particularly evident in the 80-90s and after the dotcom bubble burst in the 2000s, but in the years that followed, growth stocks performed significantly better, so the value factor was more of a drag on returns. It is also questionable whether the value premium has come under pressure in the wake of changing business models. Instead of P/E ratios and P/B ratios, SAAS companies have their own KPIs such as Customer Acquisition Cost (CAC) or Annual Recurring Revenue (ARR), Daily Active Users (DAU) and many more.

However, if one follows the reversion to the mean approach that values tend to revert to the long-term mean, excessive differences in returns between value and growth stocks could be used to speculate on a convergence of these, in this case a resurgence of the value premium. The selection of these ETFs is therefore a bet that the value factor will prevail over growth companies in the future.

It is a pity that there is no value emerging markets ETF that I know of, as I believe it would be particularly important to pay special attention to the stability of equities here. There is a tendency for the European indices to outperform the benchmark index, which could be due to the fact that Europe is more value-oriented and does not have any large growth companies like the USA, for example. Anyone interested in the Shiller-Barclays-CAPE ETF (an exciting approach in my view) should in any case be aware of the high tracking differences.

#smartbeta

#etfs
#value
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#stockanalysis