Our managers’ team monitors the markets daily in order to be able to check at all times that the investment plan you have chosen continues to achieve its goals and in addition, in order to look for possible investment opportunities that offer great prospects for the future.
Therefore, we decided to make some changes in our investment plans, but also to maintain the same composition in some others. The Secure + plan continues unchanged as it perfectly meets the purpose for which it was created: to offer a lifeline to those who seek a way out of zero interest rates and have a long- term investment horizon.
We made the following changes.
Considering the new macroeconomic data and the flowing support of governments to businesses throughout the pandemic in America, England and Europe, we have carried out a significant restructuring of the portfolio, aiming at higher dividend yield as well as exposure to bond categories that have strong profit potential. This portfolio was merged with pre-existing Income portfolio.
1. We added exposure to high yield US bonds
Corporate bonds with maturity until 2025, which we added, have the support of Fed until 2025 and this means that the risk of strong negative fluctuations is significantly reduced. At the same time, they offer attractive returns, which only there can an investor find. These bonds represent 30% of the portfolio.
2. We added exposure to emerging markets bonds
Emerging market bonds (in dollars) have the characteristics we described above, while at the same time they are expected to be boosted by the rapid recovery of emerging countries. Their trade volume increase and the stability of central bank policies have created ideal long-term conditions. The portfolio exposure to emerging market bonds is 21%.
3. We added the largest stock index
As economies recover from this historic recession, the small exposure of a conservative portfolio to stocks can provide, in addition to stability, a significant return on capital. We remind you that we are in the first phase of growth after this historic recession. We have kept in the portfolio the exposure to European government bonds, as bond purchases from ECB as well as the ongoing bonds issues in an effort to support European recovery in the post-pandemic era, will maintain the upward trend in bonds.
By changing the former version of 75% bonds and 25% stocks to the classic 60% bonds and 40% stocks, we have applied a different logic as we estimate that these percentages will make returns climb higher than the average balanced portfolio over the last 15 years.
1. We added European government bonds
Bond Purchases by ECB, as well as ongoing bond issues in an effort to support European recovery in the post-pandemic era, will maintain the upward trend in bonds.
2. We added Value stocks
We estimate that the return to normality is a first- class opportunity for over-returns on Value stocks. Considering the significant pressures, profit expectations for 2021 are particularly high. We maintained exposure to the world's largest ETF bond with at least 17,500 bonds in total dispersion and also maintained S&P 500’s Growth sector.
High Income Plan
Small but necessary changes in the composition of the portfolio in order to significantly improve the dividend yield as due to the significantly good performance of the portfolio, the current dividend yield had fallen significantly.
1. We added a High Yield FoFs that invests in other ETFs
This is a unique product that offers exposure to dozens of other ETFs of different types and also offers innovation in its management and increased dividend yield. This will help us maintain high dividend yields while achieving much greater dispersion.
We have increased the exposure to some of the existing ETFs as they proved out, through tough times of 2020, to remain top and safe and continue to offer significant dividend yield. We removed American Treasuries as they are no longer necessary to achieve stability in the portfolio. Overall, High Income Plan consists of categories that are supported by Fed's liquidity and in the last 6 months has already proved that it is moving steadily even in relatively bad times.
1. We increased the portfolio exposure to China
The way China controlled the pandemic was a turning point for Chinese stock market to reach new multi-year highs. Being the only one of the strong economies, which closes out 2020 with a positive growth rate and given the fact that in the same year China was the first country in attracting foreign investments, we believe that the current decade offers a major investment opportunity. Starting with the consumer and technology sectors, we increased China’s total exposure from 5% to 10%.
2. We reduced the exposure to bonds with maturity of 20+ years
Increasing the overall exposure to stocks is a conscious decision as we estimate that the global economy is in the first stage of recovery after a historic recession. Exposure to long-term bonds is particularly sensitive at this period of time. The overall exposure in bonds at the Growth plan has been reduced from 40% to 34%.
Accordingly, with the above changes the Growth plan maintains increased exposure to Nasdaq and S&P 500 index stocks. We consider that Nasdaq index is experiencing a decade of real innovation and evolution that will continue to offer opportunities, not only for the existing large cap companies but also for start-up companies that are listed on the Nasdaq and have a bright future.
On the other hand, it is the ideal environment for companies that aim to enhance their sales and growth mainly because of the extensive investment capital available and the zero interest rates. The Health sector remains at our portfolio not only starring due to the pandemic, but also because Health is transforming into something different from what we knew until today.
We welcome the portfolio of the future - The Growth ESG
ESG Investing is considered to be the next step in investments and already great managers and investors, invest exclusively in companies with a high score at the ESG index. In the following years the trend of attracting funds is expected to strengthen even more and this will lead to positive returns, which will surpass other traditional indicators.
Comparing the returns between the top five and the last five ESG score companies in the S&P 500 shows an over-performance of the former companies. This is completely understandable as investors estimate that companies with high ESG scores have great viability prospects and growth in the future.
Investing in an ESG portfolio can be complex. With Growth ESG plan, you can easily access this rapidly growing investment trend that will offer significant returns in the future, knowing that you always invest in the prime industries that lead this powerful investment trend.
Please remember that past performance is not a reliable indicator of future performance
This document does not constitute and shall not be construed as a prospectus, advertisement, public offering, or placement of, nor a recommendation to buy, sell, hold or solicit, any investment, security, other financial instrument or other product or service. This document is for general information only and is not intended as investment advice or any other specific recommendation as to any particular course of action or inaction.