The MoneyWeek ETF portfolio – early 2026 update

There have been no changes to our exchange-traded fund (ETF) portfolio since April, which is in line with our goal of changing it as rarely as we can. The MoneyWeek ETF portfolio has done what we want: it held up well during the US tariff shock in April (down around 7% at worst) and rebounded as markets rallied, ending the year up by 14.5%.

We were helped by our 10% position in gold, which has been extremely strong, but also by better performance of the rest of the world versus America. Within the core equity part of the portfolio, we have equal amounts in the US, Europe, Japan and emerging markets. Implicitly, this means we are very underweight America (US stocks are about 65% of the MSCI ACWI global benchmark) compared with most portfolios. This has been a huge drag on returns in recent years, but began to work in our favour in 2025.

That said, the switch from a regular S&P 500 ETF into an equal-weighted fund in March has not paid off. We think that this decision – which reduces how concentrated our US exposure is in the tech giants – is the right medium-term call, but clearly we moved too early and would have been better off in the original fund last year.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The bond conundrum in our ETF portfolio

European real estate (including UK) is showing some tentative signs of recovery and our decision to narrow our real-estate focus accordingly paid off so far. The ETF we now hold has outperformed the global one that we held previously (which is heavily weighted towards the US) and we continue to prefer the higher yield that it offers.

We hold an energy ETF not because we are especially bullish on oil, but because we think there are risks of both short-term shocks and longer-term underinvestment, and that one of the most likely triggers for sustained inflation is through energy costs. Given that energy stocks appear fairly cheap, it still seems like a attractively priced hedge against these risks.

Our bond investments are concentrated in shorter-dated bonds because we don’t think that longer-dated ones offer enough compensation for the extra fiscal and political risks. Our holdings are in US government bonds, but this is partly because the selection of ETFs currently available gives us much more granular choice for US bonds than for UK ones. However, we are now using bond ETFs that hedge the currency exposure back to sterling because we think the outlook for the dollar has become much more risky and there is no longer much benefit in having unhedged dollar bond exposure.

This is the part of the portfolio that looks most troublesome in many ways. There’s little value in bonds already and a strong chance that interest rates come down even more than investors expect (especially in the US). That would further reduce the yields available on bonds. So at some point in 2026, we may have to overhaul our bond positions – but not yet.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.