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This is essentially a 1.5x leveraged 60/40 portfolio. According to theory and backtests, you can have the performance of the stock market with the drawdown of a 60/40 portfolio.
The whole thing is called efficient core because the 1.5x leverage means you need less capital for the core and have more for the satellites to achieve the same effect.
Interesting concept for core-satellite investors. 👍
The whole thing is called efficient core because the 1.5x leverage means you need less capital for the core and have more for the satellites to achieve the same effect.
Interesting concept for core-satellite investors. 👍
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@Epi Why for core satellites? Wouldn't that also be interesting for the classic buy-and-hold index investor? 🤔
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@SchlaubiSchlumpf yes already.
Actually, the ETF + an EM ETF would be enough.
However, this is a rather complex construct and I personally would feel uncomfortable with too large a position.
However, my portfolio now has 25 positions and there will probably be at least 3 more... so I'm probably the wrong person to talk to. 😅
But the question is, which is better to leverage the bonds or to sell them anti-cyclically in dropdowns to increase the equity allocation?
Or to put it another way, why not $D5V0 instead?
Actually, the ETF + an EM ETF would be enough.
However, this is a rather complex construct and I personally would feel uncomfortable with too large a position.
However, my portfolio now has 25 positions and there will probably be at least 3 more... so I'm probably the wrong person to talk to. 😅
But the question is, which is better to leverage the bonds or to sell them anti-cyclically in dropdowns to increase the equity allocation?
Or to put it another way, why not $D5V0 instead?
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•@TotallyLost I was thinking a bit about my girlfriend when I thought about the ETF. Yesterday we killed her DEKA fund of 16k and realized that despite monthly investments of 80% of her salary (due to little spending) she will probably only reduce her capital in 8 years. She doesn't have a multi-factor portfolio like me (that would be too complicated for her) but simply 70% World/30% EM. We now have low-risk 20% and 80% etfs according to the pattern mentioned. Now there would still be room for some finetuning. I've even thought about $GERD for her 😅
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@SchlaubiSchlumpf shouldn't be so complicated that she can't explain it herself as a layperson in the end. It's very important to me that I explain to her what the choices are, but that she makes the decision herself. Even though I know that I naturally have a big influence on her decisions. But especially on the structure by pointing out to her that she should have a nest egg (which she has set aside for almost a year's net worth) and that I should point out the existence of low-risk asset classes (rolling 0-1 year euro bonds)
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•@SchlaubiSchlumpf You could suggest gold / Bitcoin in small portions (5% each). This will probably have a greater diversification effect than even more equities/bonds.
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@TotallyLost Which EM ETF would you recommend?
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•@Iwamoto In the case of an inexperienced investor, $EIMI is one of the cheapest and even includes small caps.
Otherwise, $PEH and $FYEM
The EM Value from iShares is also really cool $5MVL, flies totally under the radar, nobody talks about it, but it has left everything behind in the EM sector.
But my personal favorite is the Magna New Frontiers Fund $C084Y2, an actively managed fund that invests in frontier markets.
And since these are not represented in almost any portfolio, you can add 1-3% of this baby to your portfolio.
Otherwise, $PEH and $FYEM
The EM Value from iShares is also really cool $5MVL, flies totally under the radar, nobody talks about it, but it has left everything behind in the EM sector.
But my personal favorite is the Magna New Frontiers Fund $C084Y2, an actively managed fund that invests in frontier markets.
And since these are not represented in almost any portfolio, you can add 1-3% of this baby to your portfolio.
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•@TotallyLost $EIMI is wonderful and just right. $5MVL is great and I have it in there too. I left factors out for them, as there would be something to explain if Value didn't perform in the EM 😅
I'll save the Magna for myself. But it should be seen more as a supplement than as an EM share in the classic sense. I think frontier markets are really difficult, aren't they? I could imagine that there are still risks here that are not sufficiently rewarded.
I'll save the Magna for myself. But it should be seen more as a supplement than as an EM share in the classic sense. I think frontier markets are really difficult, aren't they? I could imagine that there are still risks here that are not sufficiently rewarded.
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@TotallyLost She has gold, but as an ecologist I don't do bitcoin to my girlfriend. 😅 She'd rather leave that kind of stuff to me
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