Portfolio Redesign: Micro Caps, Blue Chips Strategies and Real Estate Opportunities in Switzerland

There Portfolio Redesign (PF) launched in October is almost complete. The Micro Caps strategy has been strengthened and rebalanced for the second time (monthly update). As for the Blue Chips strategy, it has been adjusted for the first time (quarterly rhythm). This approach is now grouped around a limited number of positions, but of a larger size. The process of concentrating on a smaller quantity of securities explains the higher turnover during the last rebalancing. As for the TAA strategy, it is now focused on gold. Finally, the Trading Auto Signal has been very slightly underweighted.

Value / Growth

I had also mentioned my desire to implement new strategies. Initially, I had considered a "Value" type approach, to which I wanted to add a "Growth" strategy to take advantage of their synergies. However, my research was not conclusive. The stocks I identified did not stand out enough from the already existing strategies, in particular the Micro Caps strategy. This is why I preferred to strengthen the latter.

On the other hand, there is still some liquidity available, which is good, because I have another idea that has been maturing for some time. The latter has already shown promising results in my backtests in terms of diversification, performance and risk management.

Real estate

As you probably know, beyond stocks, I am a strong advocate of investing. real estate. I'm not going to tell you the whole story (you can refer to my book), but in summary, this type of asset is both profitable and relatively low risk. For this reason, I have always encouraged people who are new to the world of investing to consider buying the SRFCHA ETF. It offers easy exposure to the Swiss real estate market.

SRFCHA was part of my portfolio until about two years ago, when I decided to move into VNQ, a US listed real estate fund, which I was trading tactically, based on its momentum. Subsequently, I also chose to move away from this ETF, because it was no longer adding any value to my portfolio due to its division into separate strategies.

Ultimately, SRFCHA and VNQ do not quite replicate the historical results of real estate, as depicted in the research, in terms of both returns and risk. I remain convinced that these ETFs are relevant in the context of a basic portfolio, especially SRFCHA. However, once integrated into a more complex portfolio, they no longer generate added value.

The selection of titles

It was while writing my last articles in the series "The wallet war" that I had the light bulb moment. I should have thought about it much earlier (we are always smarter afterwards). I mention that in certain cases, if we have the opportunity, it is preferable to select our securities directly, rather than trading via an ETF. Obviously, for real estate, we are not going to start buying houses everywhere.

On the other hand, instead of going through SRFCHA, we invest directly in some of its constituents. This approach allows us to significantly improve the performance and risk ratios, as my retrospective analyses indicate. This benefits the entire portfolio. I will soon publish the transactions concerned in the members-only section. Investors with limited capital can, as in the past, continue to opt for SRFCHA in order to reduce transaction costs.

The Swiss real estate sector has been experiencing positive momentum since the beginning of the year, supported by recent interest rate cuts. Bank Swiss national. The moment therefore seems particularly propitious.

I will soon return to the subject of real estate as part of the series "The wallet war". Several backtests will be dedicated to this subject.