According to Robocash, a Croatia-based fully automated investment platform, in 2024, the optimal solution will be to keep two-thirds of the investment portfolio in fixed-income instruments.
Robocash specialists analysed 9 different investment assets to determine the optimal portfolio structure. The research examined 10 portfolio allocation models and considered asset correlations.
The Black-Litterman model portfolio promises the highest returns in 2024 but suggests allocating all funds to crypto. “Of course, this approach contradicts the idea of diversification and significantly increases the risks of investments,” the specialists commented.
The trend towards portfolio diversification remains relevant amid economic instability, the research highlighted. “Konno-Yamazaki and HRP algorithm methods suggest that we allocate all 9 analysed assets into one portfolio. This approach mitigates some risks, but it is not the most efficient in terms of returns”.
The Pareto-optimisation emerged as the most optimal option. Such a portfolio contains 64.9% of fixed income assets, namely bonds, P2P investments and deposits. The remaining part is made up of assets with variable return (30.6%) and foreign currency assets (4.5%). “The returns here are lower than, for example, in the case of maximising diversification or considering a risk-free rate for the Sharpe ratio. But this combination is optimal in terms of achieving the best risk-return ratio,” said the researchers.
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