Quality, diversification and equal weighting bring outperformance

Quality, diversification and equal weighting bring outperformance
With the Ossiam Barclays Quantic Global E ETF, Quantic Financial Solutions offers a good opportunity for diversification when using ETFs in professional portfolios. Equal weighting as a smart alternative for investing in global stocks.

ETFs have long been established as one of the most popular forms of investment. With just a few clicks, you can invest in hundreds or even thousands of stocks and thus achieve broad diversification - at least in theory. However, a closer look at market-weighted indices such as the MSCI World shows that this diversification is often less pronounced in practice than assumed, assuming the concentration of the top positions. This is where the Ossiam Barclays Quantic Global E ETF comes in, which uses its equal-weighted and fundamentally oriented strategy to specifically exclude concentration risks and thus achieve a risk-adjusted outperformance.

Concentration risk in the MSCI World
Tradable indices that cover global stocks include over 1,500 stocks from 23 countries and are often used as a synonym for global diversification. But more than 70% of these products are US stocks, and within this US share, the "Magnificent Seven" (Apple, Nvidia, Microsoft, Amazon, Tesla, Meta and Alphabet) dominate with a weight of over 35%. This extreme concentration means that the performance of global stocks depends heavily on a few tech giants - and thus also on their fluctuations and risks.
While the hype surrounding artificial intelligence and digitization has driven up the valuations of these companies, the question arises as to whether these are sustainable growth factors. If there were to be a correction in this segment, this would have a significant impact on all investors who invest heavily in market-weighted indices.

The opportunity: Ossiam Barclays Quantic Global E ETF

In contrast to classic ETFs, which are based on market capitalization, the Ossiam Barclays Quantic Global E ETF follows an equally weighted strategy. This means that the securities included are equally weighted regardless of their market capitalization. This means that the fund avoids excessive dependence on individual stocks and significantly reduces the concentration risk.
In addition, the ETF selects stocks based on fundamental criteria and takes into account the currently most likely macroeconomic scenario. This gives preference to companies that have the greatest potential in the respective economic situation - instead of simply buying the largest and best known companies.
Outperformance compared to global stocks
The equally weighted structure and the selective selection of securities have already given the Ossiam Barclays Quantic Global E ETF a remarkable outperformance. While market-weighted indices are heavily dependent on a few tech giants, the Quantic ETF benefits from a broad diversification across different sectors and regions and achieves far higher profits at the individual security level than products that use market capitalization as the basis for the weighting of individual securities.
The performance speaks for itself: The index on which the ETF is based has achieved a performance of 4.14% so far this year (YTD, February 28, 2025), which represents an outperformance of over 2% compared to the market-capitalized world index. Compared to equally weighted world stocks, the index has shown an outperformance of over 27% since its inception (September 4, 2019).



As of: February 28, 2025 Source: Cyberfinancials.com 

The ETF shows its strength particularly in phases in which the "Magnificent Seven" perform weaker. Because while classic ETFs often perform below average due to the heavy weighting in these stocks, the equally weighted strategy offers a diversified return with lower concentration risk.
Conclusion: More diversification, less concentration risk
For investors who are looking for real global diversification and do not want to rely exclusively on a few mega-caps, the Ossiam Barclays Quantic Global E ETF can be an attractive option. Its equally weighted structure reduces concentration risks, improves diversification and thus increases the long-term stability of the portfolio.
At a time when many ETFs are weighted by market capitalization and thus often unconsciously take large risks, the Quantic ETF offers a smart alternative that combines diversification and sustainability with convincing performance. Adding these to the portfolio can therefore both reduce risk and improve return opportunities – a real added value for long-term investors.
As of: February 28, 2025 Source: Quantic Financial Solutions Factsheet Risks: Equity risk: Experience has shown that equities are subject to strong price fluctuations and therefore also to the risk of price declines.
> Currency risk: Fund assets may be invested in a currency other than the fund currency. If the value of this currency falls against the fund currency, the value of the fund assets will decrease.
> Derivative risk: The fund uses derivatives for both investment and hedging purposes. The increased opportunities are accompanied by increased risks of loss.
> Sustainability risk: The ETF is subject to sustainability risks within the meaning of Regulation 2019/2088 [Article 2 paragraph 22] due to environmental, social or governance events or conditions that, if they occur, could have an actual or potential significant negative impact on the value of the investment.
Disclaimer: The above opinions are those of the author at the time of publication and may differ from the views of other individuals/teams at Quantic Financial Solutions. Reference to individual securities does not constitute a recommendation to buy, sell or hold a security, investment strategy or market sector and should not be relied upon as a profit-making strategy. Quantic Financial Solutions, its affiliated advisors or its employees may have a position in the securities mentioned.
Past performance is not a reliable indicator of future performance.

Past performance is not a reliable indicator of future performance. All performance figures include income and capital gains or losses, but not recurring fees or other expenses of the fund.
The value of an investment and the income from it can rise or fall. You may therefore not get back the full amount invested.
The information in this article does not constitute investment advice.
There is no guarantee that past trends will continue or forecasts will come true.
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Sonja Mazanec is Head of Liquid Assets at Quantic Financial Solutions. Her responsibilities include the development and implementation of investment strategies and portfolio optimization in the liquid sector.
Ms. Mazanec has extensive experience in the investment sector. She worked as a quantitative analyst and fund manager for emerging markets bonds at Erste Group and then moved into the world of single-family offices, where she gained experience with liquid and illiquid investments, both at fund level and in the area of direct investments.