Premium Portfolios Updated for 2021

For some portfolios, 2021 have been a terrible year.

For other portfolios 2021 have been a great year.

2021 saw the emergence of the covid-19 coronavirus. It has had a global profound effect on the way businesses do business.

Some businesses, like airlines and restaurants, have been hit extremely hard. On the other side of the spectrum are tech-companies, and businesses that facilitate remote work. These have done very well.

When we look at how asset classes performed in 2020, we immediately see that growth stocks have outperformed. If you had invested in large-cap growth stocks, you gained 40% in 2020. That is huge.

The asset classes that did not do well in in 2020 were:

  • Energy stocks, down 32.51%
  • Global REITs, down 10.55%
  • Commodities, down 7.84%

The value asset class did not as well in 2020 as growth. It still managed, for the most part to land in positive terratory.

Changes to the premium portfolios

The spread between growth and value stocks have impacted our 59 premium portfolios. But only to a lesser a degree.

7 portfolios have exited, and 7 new ones have entered the 44 high-risk portfolios. This is partly due to our continued additions of portfolios but also due to the above-mentioned spread in returns of value and growth. Also, quite a few portfolios have shifted positions. These are mostly portfolios that are tilted towards growth stocks.

The changes have been more profound when we look at the 14 low-risk, high return portfolios. There are no changes to number 1 and 2 places. There are changes to place number 3 and 4 howver and I have personally begun investing a portion in portfolio number 4.

The low-risk portfolios have seen their average compound return increase since last year. The best portfolio now has a CAGR (compound annual growth rate) return of 9.13% with a drawdown of about 17%.

Expense ratios have been added to all 59 premium portfolios

We have added expense ratios to all premium portfolios.

We have gone through the best-in-class ETFs that we recommend. We are furiously looking for the cheapest ETFs that best represent its asset class while also being liquid and with minimal tracking error.

This has led to the following estimated expense ratios for the premium portfolios.

The average expense ratio of the high risk portfolio is: 0.12% (the highest performaing is just 0.09%)

The average expense ratio of the low risk portfolio is: 0.08%

In other words, you can now get a super performing portfolio for just a 0.12% expense ratio.

Changes, changes

If you already have a great portfolio there is no reason to make changes to it just because growth outperformed in 2020. Next year something else will outperform.

It is important to have a well-diversifed portfolio of asset classes that are in line with your financial goals.

The premium portfolios are just that, premium. You don’t necessarily need to buy the premium portfolios product (though we will be grateful as you’ll be supporting the site.)

A balanced portfolio consisting of stocks and bonds will perform really well for many years. The premium portfolios are relevant for you if you want a statistically good shot at outperforming standard portfolios. They are relevant if you want a really good shot at getting better than average returns.

We hope 2021 will bring you health and healthy returns.

Portfolioeinstein Premium Portfolios

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