Portfolios to Watch in H1 and Ahead of H2, 2020
The first half of 2020 is in the books and boy, what a ride it has been. This 6-month period will no doubt go down in history as one of the craziest, most impactful times in the history of the modern economy. The coronavirus pandemic wreaked havoc in global markets, numerous industries were crippled and many practices that were created to counteract its effects will most likely stay with us for the foreseeable future.
And yet, some industries were able to not only weather the storm, but actually show growth in H1 2020. Below, we review those sectors that have shown promise and the investment opportunities they hold. eToro CopyPortfolios offer thematic investments in different market sectors and incorporate various strategies, offering exposure for investors looking for a managed portfolio solution.
The Crypto Market’s Maturity
Cryptocurrencies are continuing their journey into mainstream markets. If in the past this asset class was considered a financial pariah, today it has become a welcome addition to many mainstream portfolios, albeit still in small portions. As opposed to the crazy highs and lows seen in crypto markets in previous years, the crypto market of H1 2020 was often less volatile than mainstream markets. While still wildly unpredictable, strategies that took the market’s volatility into account were able to maintain a profit.
Such is the case with the Napoleon-X Partner Portfolio, which uses AI to manage a daily balanced crypto/USD portfolio. Throughout the first half of 2020, it knew ups and downs, but was able to produce steady profits of more than 50%.
eToro also offers exposure to the crypto market through the CryptoPortfolio, in which the cryptocurrencies are weighted according to market cap. Throughout H1 2020, this portfolio was able to produce steady gains and is up more than 30% year-to-date.
Outsmarting the Benchmarks
eToro is home to millions of traders, generating billions of metrics. Which is why eToro offers several machine learning, artificial intelligence, and crowd-wisdom-based portfolios, designed to leverage these metrics into actionable investment strategies.
One such portfolio is OutSmartNSDQ, which was specifically designed to beat the Nasdaq 100 index. This portfolio uses an algorithm that scans the entire eToro community, searching for “Nasdaq experts,” and creates a portfolio based on their combined sentiment. Even though the Nasdaq Composite was the most successful of the major US indices, the OutSmartNSDQ portfolio outperformed it tremendously, gaining more than 25% in H1.
Another low-risk, people-based portfolio is GainersQtr, which uses predictive algorithms to try and find the eToro investors who are most likely to generate a profit over the next quarter. Combined with a selective Stop Loss mechanism, which delists traders whose drawdown is too significant, this portfolio was able to withstand the turbulence in Q1 and bounce back in Q2, reaching double-digit gains so far this year. You can read more about this portfolio here.
When markets became too volatile, many investors turned to the PanicMode CopyPortfolio. Unlike most eToro portfolios, PanicMode utilises short-selling and other hedging strategies to help protect against loss when markets become too volatile. True to its design, this portfolio was able to produce profits of more than 30% in 2020 thus far. However, it is important to note that due to the unique nature of this portfolio, it is advisable to familiarise yourself with it and exercise caution for both short- and long-term investments.
Tech to the Rescue
While many sectors, such as travel, leisure and physical retail took a significant hit during the coronavirus pandemic, other sectors were given the opportunity to show their merits. One such sector is eCommerce. Online ordering became the norm, and while many corporations were furloughing employees, online shopping services, such as Amazon, were hiring to meet rising demand. It is no wonder, then, that the ShoppingCart CopyPortfolio, which focuses precisely on such online retailers, had an incredible second quarter, climbing more than 80%(!) to reach a total of more than 40% returns in H1.
With billions of people confined to their homes, indoor activities became increasingly popular and leading the charge were video games. In fact, during the pandemic, the World Health Organization actually issued a recommendation to play video games in order to deal with the lockdown. InTheGame is a portfolio which offers thematic investment in the video game industry, and in H1, was a clear winner with gains of more than 20%.
Lastly, it is important to remember that this crisis was first and foremost about health. Which is why biotechnology companies took centre stage. CRISPR, a revolutionary gene-editing technology, is being researched today as a means to cure everything from AIDS to ALS. However, when the coronavirus became a significant threat, some companies started looking into CRISPR-based treatments for the virus. eToro’s CRISPR-Tech Portfolio serves as evidence to investor faith in the technology, as it recovered from an earlier slump to climb 41% in Q2 and reach profits of more than 17% YTD.
Cool Heads Prevail
Looking forward to H2, 2020, it is hard to know exactly what will happen. On the one hand, economies are reopening and optimistic investors believe the worst is behind us. On the other, a second coronavirus wave could once again cripple economies, making investors more cautious. On eToro, the wide selection of ready-made portfolios offers a variety of solutions to match the needs of many investors.
With no management fees, these investment strategies could serve the needs of those who are looking for investment opportunities going into the second half of 2020.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
CopyPortfolios is an investment management service provided by eToro Europe Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
CopyPortfolios(TM) should not be considered as exchange-traded funds, nor as hedge funds.
All data is accurate as of June 19th, 2020.
Your capital is at risk.
Trading Cryptoassets with leverage is regulated and comes with a high risk of losing money. Buying Cryptoassets is unregulated in most EU countries and therefore is not supervised by EU regulatory framework and carries no EU protections.Your capital is at risk
This publication originates from the eToro ( EU) Ltd ( regulated by Cyprus Securities and Exchange Commission) and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, that it is not subject to any prohibition on dealing ahead of the dissemination of investment research, and as such is considered to be a marketing communication. eToro ( EU) Ltd, its owners, subsidiaries, group entities, affiliates or employees of the same (collectively “eToro Group”), may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Past performance is not a reliable indicator of future performance. This publication may contain ‘forward-looking statements’. Actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. None of any opinions that may be inferred from the contents of this website is intended to be relied upon as advice or recommendation of any action. All investments entail risks and may result in both profits and losses.
Notwithstanding the steps taken to manage conflicts, eToro ( EU) Ltd and any affiliated parties may have interests which conflict with your interests and may owe duties to other clients which would otherwise conflict with the duties owed by eToro ( EU) Ltd to you. eToro ( EU) Ltd may recommend to you as a client, trade ideas, financial instruments, or services, in which it or any affiliated company, or a person with whom it has an association, or one of its other clients, may have an interest, relationship or arrangement that is material in relation to the transaction concerned. eToro ( EU) Ltd, or any affiliated parties, or a person with whom any of them has an association, maybe dealing as principal for eToro ( EU) Ltd any affiliated parties or its own account.