Analyzing the long-term behavior of XSpot Growth and SPX Index

The question is: why is a portfolio a better investment choice than choosing to invest in an ETF that follows the S&P 500?

The answer is: because in the long run the result will be about the same in terms of performance, but the path will be completely different. A portfolio will have followed a smooth path as opposed to the Index ETF.

XSpot Growth Vs SPX Index Behavior

Source: Bloomberg Terminal

It is clear that the XSpot Growth portfolio offers greater diversification compared to the S&P 500 index as it invests giving weight to specific sectors, but also to countries with promising future returns, while maintaining a percentage in US government bonds that offer the necessary stability, when required.

Additionally, the XSpot Growth portfolio has subtle active management which means that the composition is properly configured with the existing environment. When there is a "clean" investment horizon, it gives weight to stocks and when "obstacles" appear, it becomes more defensive.

Why does this matter?

This is very important as investors invest money at different timing and also, they may need this money in a time horizon that they have not planned. Even more important: an investor may have planned to liquidate his portfolio in 10 years, because for example he will then be 65 years old, but at that time the markets are in a big turmoil.

There are definitely many ways to achieve our investment goal. However, we should analyze it based on the following simple reasoning: how much risk do I take to reach the same result?

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.