Asset Allocation – MORAM Portfolio

 

MORAM Asset Allocation

In this section, we detail the standard Asset Allocation of MORAM. Although as we have explained in several parts of the website, each managed portfolio has a different distribution depending on the specific characteristic of the owner, we take this portfolio as a reference.

 

Equities

Currently, 55% (without taking in account companies included in the commodities section)

  • Equities portfolio is subsequently split between active and passive management (85% managed vs 15% Index funds).
  • We tend to have in our portfolio both value and growth companies
  • Passive management is focused on large-cap, growth and emerging markets (complementary of the type of companies we hold in the managed portfolio).
  • Active management focused on small caps, mainly in the US.
  • By geography, EUR (20-40%), Dollars (50-70%), Rest (0-20%).

Details about the companies which are part of the actively managed portfolio can be found in the analysis of companies section.

Fixed Income

Between 0% and 20%

Currently, due to the macroeconomic environment, the exposition to fixed income is very limited. In any case, it would be through short-term bonds of developed countries of corporate. We try to avoid junk bonds as the most aggressive part in the risk-return balance of the portfolio is easier to get through equity for us.

  • However, we are looking at some interesting ETFs for the coming months

Cash

Target 0-10%.

Currently, close to its highest percentage as a consequence of limited exposition to fixed income.

Alternative Investments

Target 0-10%

Mainly Private Equity Funds, 

Real Estate

  • Currently, the only exposure that we have to this sector is via the Real Estate Index Fund from Vanguard. This fund has exposure to several REITs segments such as Residential, Retail and Warehouses. Mainly in the US, but it also has exposure to Europe and Asia. We feel that the REIT prices have been hugely impacted by the Covid-19. However, we believe that REITs is a good asset to invest having a 5 years horizon because of both inflation perspective and good Value player.

Alternative Investment tend to exhibit low correlation with traditional stock and fixed income investment.

Cryptocurrency

We started to take some exposition to cryptos at the beginning of 2021. It was due to the concern about the massive amount of money printed by central governments. Along this period, we have read and learn a lot about Bitcoin, Ethereum and some scale solution such as Matic. Consequently, we have started to understand the possibilities of both Bitcoin as store of value and Ethereum as the new internet (Web3 vs Web2)

Commodities

Target: 0-15%

  • It includes stocks from upstream companies in the oil and gas industry.
  • We have written several articles related to the oil crash that happened in April. Our point of view is that because of the adjustment made by the OPEC+ and the weakness of the dollar, commodities are going to take advantage of this environment.

Note: Strategy described here do not suppose any investment advice. They are the guidelines followed by MORAM. Each person needs to understand the risk they want to take and the financial targets they are pursuing

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