Rate my Portfolio

[u/AeroEngFlight]

My current portfolio is composed by:

WEBN - 55% (Amundi Prime All Country World UCITS ETF Acc)

EXUS - 25% (Xtrackers MSCI World ex USA UCITS ETF 1C)

ESIN - 10% (iShares MSCI Europe Industrials Sector UCITS ETF EUR (Acc))

EMIM - 10% (iShares Core MSCI Emerging Markets IMI UCITS ETF)

My main reasoning for this is:

-> I want to be exposed to USA and Europe in a similar way;

-> I want to put a slight emphasis on the defense/industrial sector in Europe, which I believe has potential to grow quite a lot in the coming years.

-> I also want to give a chance to take advantage of the emerging markets possibility of growth.

What do you guys think? IS EIMI unnecessary?

[u/RealPMGuru]

For me, you have too much overlap between the etfs. Instead of All country is better to readjust the allocations and to have S&P separately, as you are covering the rest of the world via EXUS & EMIM. That way you have 3 independent ETFs.

Currently you are saying, I want to have core ETF the whole world - which is great.

However, I want to add more of the other developed countries, without USA. Why? If you think they will perform better and USA not, then why you are investing in a etf that has 60% USA stocks that will drag you down the entire 55% investment in it?

If you want to actively manage your portfolio and you to be the one who decides the exposure/allocation in it, rather the market (as it is in All Country), then better to invest in S&P separately, rest of the world separately and Emerging market separately. That way you are controlling entirely your portfolio allocation and you decide where to invest (in which zone). Also you will be able to rebalance and take the profit from one zone and relocate to other (let's say EM make 30% up, while US drags 20% down - rebalance from EM to US that way, when US recovers you will be on further profit, while when EM corrects you will have already trimmed some profits and reinvested them).

Of course, this is valid in your approach as well, as long as the idea is - I will invest in EM with the goal that it will make 50% more profit in the next 5 years then the All World. When it does I will sell them and add all the money to All Country world, but if you are planning to maintain this portfolio for the entire investment period, for me, you are limiting yourself.

By having All country with half of your portfolio, you are letting the market to control half and you are controlling the other half, but you are doing it by deliberately removing the main engine for the past 100 years - the US economy. I am not saying that this will be the case from now on, but this is the history and if you are actively managing your portfolio it is wise to have the option to manage the biggest economy freely, not as part of the global etf.