Financial advisor Gerd Kommer recommends wise investments in stocks, exchange-traded funds (ETFs), gold, and Bitcoin.
Going with Kommer's Picks for 2025: The MSCI World ETF and Beyond
Financial guru Dr. Gerd Kommer shares his investing wisdom, managing over a billion euros in assets for clients and a Kommer-ETF worth 400 million euros. So, it's worth paying attention when he talks about building a portfolio and trading at the stock exchange in 2025.
Kommer: Cracking the Code on Stocks Beyond Tech and US
According to Dr. Gerd Kommer, "everything except Tech and the US is fairly or undervalued." Despite having strong stock market years, valuations outside the US market and technology sector remain attractive. The "rest of the world" offers promising return prospects for investors in the long run. However, Kommer warns that it takes time for valuations to return to normal levels (regression to the mean): "We've learned from 200 years of stock market history that overvalued valuations eventually return to a normal level, but nobody can predict exactly when." Investors looking to diversify and reduce their US-heavy exposure can achieve this with global stock ETFs that do not overweight Tech and the US.
Kommer's Take on Gold and Bitcoin
Kommer views gold and cryptocurrencies, particularly Bitcoin, as possible additions to a portfolio. He explains that crypto has become less risky with the approval of Bitcoin ETFs in the US, even though it's not yet a mainstream investment. Investors can consider allocating up to 10% of their portfolio to crypto and up to 15% in combination with gold—but with caution. Kommer emphasizes the importance of setting rules, such as rebalancing at major price increases to maintain the initially set shares and avoid risky investments.
Broad Diversification: Kommer's Key to Success
Kommer advises investors to lean on scientifically based strategies and reduce risks through broad diversification. He believes that focusing on individual stocks like Wirecard increases risk without the promise of higher returns. Especially for investors in the wealth accumulation phase, a diversified portfolio with a focus on the global stock market is advisable. In addition to stocks, bonds should also be considered, despite their unpopularity in Germany.
Discover how Dr. Gerd Kommer would build a 2025 portfolio, the ETFs he favors, and the pitfalls to avoid in investments, right here.
Before you go, be sure to read: 26.21% Dividend yield by the end of the year: The best dividend stocks in December.
Regarding Kommer's Recommended ETFs:Dr. Gerd Kommer is known for advocating cost-efficient, globally diversified investing with the Solactive Gerd Kommer Multifactor Equity Index. His approach emphasizes multiple developed and emerging markets, integrating multiple equity risk factors, and minimizing costs.
The primary ETF associated with his methodology is the L&G Gerd Kommer Multifactor Equity UCITS ETF (Acc). This ETF invests in companies worldwide while balancing US and tech concentration by using a combination of market capitalization and country GDP weighting. Additionally, it provides factor exposure to Size, Value, Quality, Investment, and Momentum while filtering out IPOs and highly leveraged stocks.
For those seeking alternative or broader exposure, Kommer suggests ETFs that track the MSCI All Country World Index (ACWI) or FTSE All-World Index. However, these indices retain their US and tech concentration due to their market-cap weighting.
In summary:When looking for a diversified global portfolio for 2025 that reduces over-reliance on tech and the US, Dr. Gerd Kommer's primary recommendation is the L&G Gerd Kommer Multifactor Equity UCITS ETF (Acc). This fund combines global index weighting with innovative country and factor weighting to achieve a more balanced, global exposure outside US/tech dominance.
In line with Dr. Gerd Kommer's advice, one can consider allocating a portion of their personal-finance or investing portfolio to the L&G Gerd Kommer Multifactor Equity UCITS ETF (Acc), as it provides a globally diversified investing approach that minimizes over-reliance on tech and the US. Furthermore, when diversifying and reducing US-heavy exposure, investors might also want to look into ETFs that track the MSCI All Country World Index (ACWI) or FTSE All-World Index, even though these indices retain their US and tech concentration.
%2C%20gold%2C%20and%20Bitcoin.){kind=link}