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 reliant on the US dollar and US tech stocks. This can pose risks, as the performance of these assets can fluctuate significantly.
- Overweighting of Certain Regions and Sectors: The MSCI World ETF is capital-weighted, meaning that larger companies and regions like the USA hold a larger share in the index. This can lead to unintended 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 mitigate the overweighting of certain regions and sectors and achieve broader diversification.
- Diversification Across Asset Classes: A wide diversification across various asset classes, such as stocks, bonds, and alternatives, can help minimize risk and stabilize returns.
- Gold as a Warning Signal: Vorndran views the rising gold price as a warning signal for confidence in fiat currencies worldwide. A small position in gold could serve as a hedge.
Why Young Savers Have Good Opportunities
- 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 rupture in the bond market.
- Weakening US Dollar: The US dollar is weakening, which may impact the global economy.
In summary, Philipp Vorndran recommends thinking beyond the MSCI World ETF and pursuing broad diversification to minimize risks and capitalize on long-term trends. Young savers have good prospects for investing wisely due to their long-term perspective.