eToro Portfolio Investing

Alan Penny

25 June 2021

6 min read

etoro portfolio investment

In various analytical reviews, you will often hear the concept of portfolio investing. An investment portfolio is the volume of your real or financial assets and this is a feature offered by eToro broker. In other words, the money that you invest in certain instruments of the stock, foreign exchange, and other markets. Figuratively speaking, each instrument in this conditional portfolio has its own cell, its own department.

eToro Forex broker lets you choose a balanced, fully allocated portfolio and focus on particular market segments. Portfolios give access to different trading themes. Some of them could include machine learning or data science.

A lot of people ask the question of why to invest in portfolios on eToro. First of all, you will get a simplified and dynamic investment experience. eToro portfolios are based on research, knowledge, and risk management. The majority of portfolios are created by the eToro-Investment team.

What does the Investment Portfolio include?

An investment portfolio may include stocks, bonds, real estate, business. There is a lot of variety of portfolios and eToro in its turn provides numerous opportunities.


That is, equity securities that secure the owner’s rights to receive a part of the joint-stock company’s profits, participate in its management, and have the right to count on a part of the property that will remain after the joint-stock company’s liquidation.

Shares are ordinary. For one share one vote is given at the meeting of shareholders, dividends are paid from the net profit of the joint-stock company, their size is determined by the board of directors of the enterprise, and then it is recommended to the general meeting of shareholders, which can only reduce the number of payments, but not increase them.

Preferred shares are another type. Dividends on such shares are paid earlier than for holders of ordinary shares, and if for some reason they are not paid, then the shareholder has the right to vote at the general meeting).

portfolio investing with etoro


They are issue-grade debt securities, the owners of which can receive from the issuer of the bond within a specified period of time the par value of this bond (in cash or in another equivalent), or a certain percentage of the value of the bond (coupon yield), or discount income (that is, the difference between the cost at which the bond was purchased and the redemption value of that bond).

There are government bonds (otherwise they are called sovereign), issued by the authorities to cover the budget deficit, and government-guaranteed, municipal bonds (issued by a city or local authorities as a loan to finance various projects secured by the municipal property), as well as corporate bonds.


That is the obligation to buy or sell a certain asset (securities, currencies, commodities or interest rates) in a certain amount at a certain time at a predetermined price (all these parameters are specified in the specification of the exchange contract). The exchange acts as a guarantor of the transaction, taking an insurance deposit from the seller and the buyer.

Real estate

The real estate that can be included in the investment portfolio may differ in terms of rental yield, degree of risk, the growth rate of capitalization, etc. You can invest in residential, commercial, hotel, and other types of real estate. The investor can receive income from the lease or from the resale of the object.

Investments in real estate have a high potential for capitalization growth of an object and are characterized by a low level of risks.

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Pros and Cons of eToro Investment Portfolio

In general, when we are talking about any subject there are certain advantages and disadvantages that we should take into account. An investment portfolio is no exception. While eToro offers quite a lot of advantages, cons also exist. Let’s have a look at both of them.


Benefits of eToro investment portfolios include research, experience, technological innovation, methodology, risk management, and no extra fees. eToro, which is one of the most renowned brokers in the Forex industry tries its best to satisfy the needs of its customers.

Risk management

Every portfolio comes with particular risks. In order to avoid any of these risks, it is necessary to be aware of the management tools and consider possible complications. As soon as you choose a specific portfolio you will be able to check risk considerations and the tools of management.


eToro as we have already mentioned above has been in the field for a long time and the broker knows how to approach matters correctly. The teams have a deep understanding of markets and each portfolio is backed by professional research that will help you a lot.

No Commission Fees

A lot of traders, when they are choosing investment portfolios, refrain from doing so because of the additional fees that the broker might impose. On eToro, there are no extra management fees. As soon as you choose an investment portfolio that’s pretty much everything you need to do.


In addition to the benefits that eToro broker offers to customers, there are several cons that we should consider:

Comprehensive Knowledge

First of all, when working with portfolio investments, you risk losing your funds by choosing the wrong securities, making transactions at the wrong time, and failing to sell securities profitably. Also, without specific training in the field of securities trading, it will be quite difficult for you to work with portfolio investments. It should be borne in mind that you also cannot predict how the issuing company will behave: with a low level of profit of the enterprise, you may not receive dividends or receive them in full, and your bonds may be withdrawn or redeemed before the expiration date of their repayment. In the end, the business may go bankrupt.

General Market Factors

General factors including inflation, political events, changes in legislation can significantly affect your investment portfolio. A lot of unexpected things happen so it is impossible to predict each of them. Your investment portfolio could be jeopardized in the case of such events.


Why do you need an investment portfolio?

First of all, you need to decide – why is such a portfolio being created? Someone wants to ensure their old age, and someone invests in order to earn more money for current expenses. An investment portfolio is a convenient tool for achieving any goals. After all, by investing in various instruments, you can reduce risks and maintain profitability. In other words, if it doesn’t work out somewhere, there are still other options. eToro broker in its turn will provide different tools and assistants to meet your needs.

What is the profitability and risk in an investment portfolio?

The main value in organizing investment portfolios is their risk and profitability, as well as diversification of risks. The most important question, in this case, is how much money is the investor willing to lose? These are the risks. The risk of an asset is a volatile value that depends on many factors. The portfolio return is calculated as the total amount of return on certain types of stocks and securities, including risk-free assets. To reduce the risks in the portfolio, it is necessary to include securities in different directions in their yield. The higher the risk of the project, the higher the requirements for income.

Written By
Alan Penny

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