Hello everyone,

Today I would like to introduce you to my recently reorganized portfolio and tell you about my motivations. Briefly about me: I'm 25 years old, currently studying for a Master's degree in business administration and working part-time as a student trainee. Starting next year, I intend to invest a savings installment of 1,000 euros every month. My stock market experience so far started in 2021/2022, and since then I have lived through almost every emotional up and down: from falling into the falling knife (Alibaba $BABA (-0,49%) PayPal $2PP, and many more) to speculative leveraged products and options. Fortunately, despite extreme fluctuations, I ended up at around plus/minus zero.

After dabbling in stock picking (mostly tech stocks) for a while, I realized that my biggest weakness is the lack of staying power for a consistent strategy. Neobrokers are like a game to me in a way, always tempting me to be more active. As a result, I regularly discard concepts that are actually promising - if only I had pursued them consistently. I am now learning my lesson from these findings: I want to implement a long-term, broad-based ETF strategy, which I will also share and track transparently on GetQuinn.

At the end of 2024, I therefore closed all my previous positions and am making a "clean" new start. My portfolio consists of the following components:

-NASDAQ 100 (25%) $XNAS (+0,15%) - the driving force for me in terms of US technology.

-FTSE China 50 (25%)
$DBX9 (-0,18%) - offers long-term potential in a dynamically growing market in my view.

-Euro STOXX 50 (20%)
$XESC (+0,47%) - Europe as a solid addition with established companies.

-Ossiam Shiller Barclays CAPE US Sector Value (15%)
$216361 (+0,35%) - deliberately focuses on value aspects and adds substance to my tech bias.

-FTSE India (15%) $FLXI (-0,74%) - another growth theme with exciting future prospects.

I find the symmetry of the portfolio particularly reassuring (even if perhaps irrational): USA-Tech stands opposite China, USA-Value stands opposite India, and there is also a European anchor. I am investing a total of just under EUR 15,000 at the start, so the percentages correspond exactly to my expectations. In future, I plan to divide the monthly savings installment of EUR 1,000 evenly between all ETFs.

My rebalancing approach

I will not invest my special payments (e.g. vacation pay, bonuses) immediately for the time being, but will keep them available as a cash reserve. On the one hand, I want to be able to react to possible price slumps in individual markets, and on the other hand, I use the saved cash quota for rebalancing at the end of the year. I don't sell anything, but add to the ETFs that have lost the most in relative terms over the course of the year. This allows me to keep the portfolio weighting more or less in balance without having to deal with short-term fluctuations too often.

Why GetQuin?

GetQuin allows me to monitor my portfolio performance transparently and at the same time exchange ideas with the community. Above all, I hope to receive honest feedback on my chosen structure and my rebalancing approach. At the same time, the platform motivates me to stick to my strategy in the long term - because I realize every day that constantly switching back and forth often only causes additional costs and stress.

I look forward to hearing your opinions:

- What opportunities or risks do you see in this ETF selection?

- Do you have any tips on how I could make my rebalancing even more efficient?

- Are there certain markets or sectors that you think I am neglecting or overvaluing?

Thank you very much for your opinions and advice! I am looking forward to a stimulating discussion and hope that we can inspire each other.

Best regards

A (hopefully) reformed stock market enthusiast in his second attempt

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 (-0,17%) (World | TER 0.30 % | TD -0.02 % | 3.5 bn Investv. | 3Y Underperf. vs. World - 2,1 %.)
• $IUVF (+0,25%) (USA | TER 0.20 % | TD -0.24 % | 1.7 bn | 3Y Underperf. vs. S&P 500 - 19,5 %.)
• $XDEV (-0,15%) (World | TER 0.25 % | TD -0.09 % | 1.7 bn | 3Y Underperf. vs. world - 1,7 %.)
• $IEFV (+0,17%) (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 (+0,35%) (US | TER 0.65 % | TD 0.66 % | 2.5 bn | 3Y Underperf. vs. S&P 500 -3,35 %)
• $CAPE (+0,54%) (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
#valueinvesting
#portfolio
#stockanalysis

After being instructed by @DonkeyInvestor how to present your portfolio on getquin in a sensible way in order to receive sensible feedback, I am hereby starting an attempt to present my model portfolio, which I would like to work towards in the long term.

I already posted my current portfolio the other day, the model portfolio presented here is a kind of wishful thinking of what my portfolio should/could look like in the long term.

My investment horizon and my goals:

I am 22 years old and studying economics, so I still have many years to go before my state pension. However, my goal is to retire a little earlier, i.e. when I can live off my portfolio without reducing its value every year.

My investment strategy:

I have opted for a buy & hold strategy with two ETFs as the fixed core of my portfolio, a few individual stocks that I am convinced of in the long term and a small crypto mix.

The ETFs:

ETF no. 1: $IS3R (+0,06%)

ETF No. 2: $216361 (+0,35%)

My single stock/thematic ETFs:

45 individual positions with 1% weighting each, see sample portfolio.

My cryptos:

Approx. 5 to max. 10% crypto weighting.

Of which 50% $BTC (-1,17%) , 25% $ETH (-0,31%) , 25% $SOL (-1,05%)

Why this investment strategy?

I do not yet have sufficient experience with economic indicators and find it difficult to assess how an interesting share is valued at the current time, which is one of the reasons why I have opted for a buy & hold strategy with the two ETFs as the fixed core of my portfolio and a few individual shares that I am convinced of in the long term.

About the ETFs:

I would like to weight both ETFs at 25% each and therefore already invest in both regularly.

ETF no. 1: MSCI World Momentum ETF

This ETF differs from the normal MSCI World in that it overweights stocks with current price momentum, which has proven to be a superior strategy in recent years. With this ETF, I always have the winners of current developments in this rapidly changing world in my portfolio over the long term.

ETF no. 2: Ossiam Shiller ETF

For me, this ETF offers a nice complement to the Momentum Factor ETF, as it invests somewhat more anti-cyclically. The ETF selects the five sectors with the lowest relative CAPE (Cyclically Adjusted Price Earnings) from the S&P 500. The relative CAPE coefficient assesses the relative costliness of a sector based on its current and long-term historical prices and earnings. The method then calculates the sector with the lowest price momentum over a 12-month period, i.e. the sector with the worst performance in the period under review. Each of the remaining four sectors is given the same weighting (25%) and the components of the investment universe are rebalanced on a monthly basis. In short: This is a rather anti-cyclical way of investing, but by leaving out the worst performing sector you are also not falling into the trap.

About my individual stocks/thematic ETFs:

As already mentioned, I am not yet experienced in judging whether a share is currently fairly valued or not. I also don't want to have any companies in my portfolio where I have to research every two weeks whether the business model will still be needed in the near future or not. However, I don't want to do without individual shares altogether either, as a pure ETF portfolio would simply not give me any pleasure. So my solution is as follows:

I take buy&hold-compliant individual shares into the portfolio, where I am simply convinced of the business model in the long term.

I would take these 45 individual positions (including the 3 thematic ETFs) and weight them all at around 1% (excluding the weighting of individual companies in the ETFs). If you buy shares to hold them for more than 20 years, the current valuation plays a somewhat less important role. Even stronger corrections are not the end of the world here, but rather offer good opportunities for additional purchases.

The following shares are in my current portfolio but not in the model portfolio:

• Abbvie $ABBV (-0,17%)
  
• Anglo American $AAUKF
  
• Celsius Holdings $CELH
  
• Edwards Lifesciences
• Morgan Stanley $MS (+0,44%) (replaced by S&P Global in the model portfolio)
• Novo Nordisc $NOVO B (+1,77%)
  
• Nvidia $NVDA (+0,57%)
  
• ParTec AG $JY0
  
• Redcare Pharmacy $RDC (+2,8%)
  
• Shopify $SHOP (-0,11%)
  
• Hershey $HSY (+0,08%)
  
• Walt Disney $DIS (-0,77%)
  

Of course I won't sell all of these stocks immediately, I just think that they are rather unsuitable for my long-term strategy, even though I still see good potential for some of them in the near future...

I simply blindly added a few of them to my portfolio at the time without having really looked into the respective company in detail. I will think again (also taking your comments into account) about whether I want to keep these shares or not and when I might sell them.

-. A few of the 45 positions in the sample portfolio are certainly not classic buy & hold companies, for example Tesla, BYD, Intuitive Surgical, MercadoLibre etc., but they are companies that I am personally convinced of in the long term and that I assume will perform very well in the long term.

-. I am aware that the GAFAM stocks that I have in my portfolio as individual positions are also heavily weighted in the ETFs, which is intentional, as I find these companies so enormously strong that I have no problem with them having a total weighting of around 3-4% through individual positions and ETFs.

-. The high US weighting has bothered me for a long time, but I'm coming to terms with it more and more. Many of the companies in the model portfolio make their sales worldwide anyway.

About my cryptos:

I don't want to give cryptos a high weighting, as there is a very high risk involved. I have set myself a 5% weighting. If the weighting exceeds 10%, I halve it again and put the profits into equities. However, if the weighting falls below 5%, I'm happy to buy more, as cryptos naturally also offer great performance opportunities and the high volatility means there are always opportunities to buy.

My outlook:

I will continue to save in the two ETFs and make sure that I add 45 individual positions to my portfolio in the long term, where I am relaxed and also expect a good performance. As things stand, these are the 45 positions from the model portfolio.

Which I am consciously doing without:

-. I am not a fan of dividends. Even if the psychological advantages should not be underestimated, there are simply many reasons why a focus on dividends does not make much sense as a young investor. I want nice price gains that are not held back by high dividends. That's why you won't find any tobacco or oil stocks in my portfolio.

In the withdrawal phase, I will still receive reasonable dividends, as I have some dividend growth stocks in my portfolio, which I think will be noticeable after a few years. I would also like to finance my pension simply by selling some of the stocks.

-. I also deliberately avoid stabilizing factors such as gold. It's unnecessary with an investment horizon as long as mine and simply costs returns in the long term.

I hope the presentation of my strategy is clearly formulated, I would be extremely pleased to receive factual and detailed feedback from you and I will also take criticism to heart.

Many thanks in advance! 🙏🏼

Active ETFs - really outstanding, but what are the risks?

Hello everyone -

I added the active ETF to my portfolio last year $216361 (+0,35%) last year and am continuing to build up the position.

Who of you has experience with such active ETFs. In my view, these track an index but aim to outperform it by having fund managers develop specific strategies for targeted deviation in order to regularly adjust the fund composition.

One advantage for investors is that active ETFs are cheaper than traditional actively managed funds that are not traded on an exchange.

When I look at this comparatively, active ETFs do surprisingly well and deliver really good annual returns. In addition to Ossian, active ETFs are also available from Fidelity International, Invesco and JP Morgan Assets.

The benchmark with the MSCI $IWDA (+0,05%) is also impressive.

Addition: Thanks for the first comments; therefore also getquin benchmark to $VUSA (+0,07%) ...

What risks do you see with active ETFs compared to passive ones?

$216361 (+0,35%)
$IS3R (+0,06%) I could well imagine these two ETFs in combination as a long-term core portfolio (around 50% of the total portfolio). The two indices complement each other very well and both have historically always outperformed the MSCI World. What do you think? Would this combination be a good core portfolio?

🛒 Purchases at the end of October 😁 ✌️

$216361 (+0,35%)

Ossiam Shiller Barclays CAPE US Sector Value ETF

In addition to the savings plan, 5 individual shares of my favorite ETF were added to the portfolio on Halloween 😎

#US sector rotation 💫😉

Mal 'something of the "anti-cyclical" ETF on the S&P 500 put on 💫🍀✌️

...hopefully also anti-cynical 🤷‍♂️ 🙈 😇