Alternative investment strategies beyond the MSCI World ETF
Philipp Vorndran, capital market strategist at Flossbach von Storch, discusses in an interview alternative investment strategies that go beyond the MSCI World ETF. Here are some key points and tips he provides for smart investments in 2025:
Why the MSCI World ETF is not enough
- Dependence on the US dollar and US tech stocks: The MSCI World ETF is heavily dependent on the US dollar and US tech stocks, which can pose risks as the performance of these values can fluctuate significantly.
- Overweighting of individual regions and sectors: The MSCI World ETF is capital-weighted, meaning larger companies and regions like the USA hold a greater share of the index. This can lead to unwanted concentration.
Alternative investment strategies
- MSCI World equal-weight: Vorndran suggests switching from the capital-weighted MSCI World ETF to the MSCI World equal-weight ETF. This can help to mitigate the overweighting of individual regions and sectors and achieve broader diversification.
- Diversification across different asset classes: A broad diversification across different asset classes, such as stocks, bonds, and alternatives, can help to minimize risk and stabilize returns.
- Gold as an alarm signal: Vorndran sees the rising gold price as an alarm signal for confidence in unbacked currencies worldwide. A small position in gold could serve as a hedge.
Why young savers have good prospects
- Long-term perspective: Young savers often have a long-term perspective, allowing them to better withstand market fluctuations and benefit from long-term trends.
- Flexibility and adaptability: Young investors are often more flexible and can more easily adapt to changing market conditions.
Loss of trust and economic challenges
- Loss of trust in government institutions: Vorndran warns of a profound loss of trust in government institutions and their bonds, which could lead to a break in the bond market.
- Weakening US dollar: The US dollar is weakening, which can have an effect on the global economy.
In summary, Philipp Vorndran recommends thinking beyond the MSCI World ETF and pursuing broad diversification to minimize risks and benefit from long-term trends. Young savers have good chances of investing wisely due to their long-term perspective.