#41 Full transparency of individual securities: with the ETF-Lookthrough

If you invest your money purely rationally, you are probably interested in the return. And perhaps – or hopefully – also the risk. But many would actually also like to see what they are investing in. In other words, in which companies, or rather in which equities, in which bonds.

If you invest in individual securities, this transparency is provided, but at the expense of diversification: the portfolio then contains only a few stocks or bonds. ETFs, on the other hand, offer broad diversification, but the individual securities are often not immediately apparent. So far, you had to choose: either a broadly diversified but abstract investment or a tangible but inefficient strategy.

The factsheets for ETFs usually only show the top 10 positions, but nothing more than that. And if you have several ETFs in your portfolio, it becomes quite a chore to add it all up.

The solution: ETF-Lookthrough

To close this gap, we have developed the «ETF-Lookthrough». With the ETF-Lookthrough, you can view all the individual securities in your ETF portfolio. Both equities and bonds.

By default, the individual securities are sorted according to their share of the total portfolio. In addition, it is possible to search for individual companies. This function is not only available to True Wealth clients, but also to interested parties who wish to open a free test account.

More than just transparency: risk management with the ETF-Lookthrough

ETF-Lookthrough is not only a tool for viewing individual securities, but also an important part of risk management at True Wealth. As a wealth manager, we have a responsibility to ensure that investment risk is not overly concentrated on individual companies, whether in equities or bonds.

Although ETFs generally offer a certain degree of risk diversification, they can still lead to an unwanted concentration on certain companies. That is why the system automatically monitors the portfolios and sets reasonable limits on exposure to individual companies.

We have developed our optimized investment strategies – known as model portfolios – to be as diversified as possible. But even those who incorporate individual preferences into their investment strategy benefit from automated risk control.

The diversification gauge is a useful tool here. It shows whether your portfolio is optimally diversified. The ideal value is 10, whereas a minimum of 5 is required. Of course, diversification is not only about individual securities, but also other factors.

Why not try it out for yourself right now? Open a test account and select «Portfolio Characteristics». Under the «Companies» tab, you can now use the search function to enter your favorite company.

Do you find the ETF-Lookthrough useful? Send me an e-mail with your feedback.