From MoneyWeek · · 1m 40s
MoneyWeek ETF Portfolio Update
MoneyWeek adjusts emerging markets and AI exposure in ETF portfolio.
In brief
MoneyWeek adjusts emerging markets and AI exposure in ETF portfolio. MoneyWeek reduces European real estate to 5% and adds AI-focused bonds to their ETF portfolio as AI investment cycles shift. Originally reported by MoneyWeek.
Portfolio update
We last updated the MoneyWeek ETF portfolio in July when we added one new position, bringing in WisdomTree True Emerging Markets (LSE: WEMP) to balance the growing technology tilt in our long-standing iShares Core MSCI Emerging Markets (LSE: EMIM) position.
Emerging markets allocation
We now have 15% in emerging markets, which sounds high but the Korea and Taiwan element (which is around 50% of EMIM) is now a play on the ai investment cycle to such an extent that it no longer seems to make sense to think of them as subject to the classic emerging-market trends.
AI exposure
Combined, we have about 10% in emerging markets and about 5% highly geared to ai capex. The latter is something to keep in mind if the ai boom ends and we want to cut exposure.
Real estate holding
Our real-estate holding Xtrackers FTSE Developed Europe Real Estate (LSE: XDER) is struggling due to higher energy costs, higher inflation and higher interest rates over the medium term.
Real estate strategy
We could consider adding a fund like iShares Global Infrastructure (LSE: INFR) but this is also selling off as long bond yields rise. For now, we will add 5% from XDER plus the remaining 5% from our uninvested cash to iShares $ TIPS 0-5 GBP Hedged (LSE: TI5G).
New allocation
This move takes the portfolio to 20% in total from the underlying bonds in iShares $ TIPS 0-5 GBP Hedged (LSE: TI5G), which offer a 2.8% real yield with limited interest-rate risk.
In short
MoneyWeek reduces European real estate to 5% and adds AI-focused bonds to their ETF portfolio as AI investment cycles shift.
