High concentration in portfolios: How to protect your assets with ETFs

High concentration in portfolios: How to protect your assets with ETFs

The MSCI World is a popular index that many investors rely on to invest in global stock markets. However, investing in this index alone may result in a high concentration in just a few companies, which may represent increased risk. Historical examples have shown that such a strategy can fail if these few companies perform poorly.

In order to protect your assets, it is advisable to diversify your portfolio with complementary ETFs. These offer the opportunity to invest in other regions, sectors or asset classes and thus spread the risk. Wider diversification can help offset losses in one area if there are declines in certain segments of the market.

Investors should therefore reconsider their strategy and consider whether greater diversification of their portfolio is necessary to protect themselves against possible risks. Choosing the right complementary ETFs depends on individual goals, risk tolerance and market forecasts. It is advisable to obtain thorough information before making an investment decision and, if necessary, seek professional advice.

It remains important that investors are aware of the potential risks and adapt their investment strategy accordingly in order to achieve long-term success. The right balance between the MSCI World and complementary ETFs can help mitigate market volatility and optimize long-term returns.