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Like many investors, I’ve seen some huge gains in my ISA and SIPP recently. Thanks to the AI boom, several of my holdings have soared.
While this is obviously great, I’m a little bit concerned about the pace of the gains recently (and the potential for a sharp pullback). As a result, I’ve been thinking about how I can de-risk my portfolio.
Taking some profits
I gave this issue a lot of thought last weekend. And I came up with a three-part strategy designed to lower my overall risk levels (and help me sleep better at night).
The first part of this strategy involved trimming or completely selling a few of my holdings that have soared. I did this with a few different stocks and funds.
For example, I sold an AI fund I owned. I figured that I already have exposure to a lot of the fund’s holdings (eg Nvidia) in other funds or directly, so it was increasing my risk levels.
This freed up some cash.
Rebalancing my portfolio
The next part of the strategy involved redeploying some of this cash into areas of the stock market that are relatively unrelated to tech and AI. Here, I put money into European stocks and the Healthcare sector via ETFs.
The European ETF I went with was the iShares Core MSCI Europe UCITS ETF. It does have some technology in it but looks very different to a S&P 500 or global index fund.
The healthcare ETF I opted for was the Xtrackers MSCI World Health Care UCITS. This gives me access to a whole portfolio of world-class healthcare businesses.
I think both of these products are good hedges against an AI meltdown. If tech shares pull back, these areas of the market could offer some protection.
Looking at defensive dividend stocks
The final part of my strategy, and one that is still a ‘work in progress’, is allocating some capital to more defensive individual stocks. Here, I’m looking to increase my exposure to rock-solid stocks that are unlikely to blow up in the event of an AI-related pullback.
Now, I’m still doing my research here, but one stock that looks very interesting to me is Coca-Cola HBC (LSE: CCH). Listed on the London Stock Exchange, it’s a major bottling partner of US-listed Coca-Cola.
This stock caught my eye for two reasons. First, it’s had a big pullback in recent months and now looks attractively valued again.
Currently, it trades on a forward-looking price-to-earnings (P/E) ratio of 14. As for the dividend yield, it’s about 3.5% (looking at the 2026 dividend forecast).
The second reason is that I spotted that two company directors have been buying stock recently. In October, two board members invested around £385,000 in the company.
Insiders only buy stock for one reason – to make money. So, the buying activity here grabbed my interest.
Of course, this stock has its own risks. These include geopolitical flare-ups, supply chain issues, and changing consumer preferences.
I think it looks pretty attractive at current levels though. In my view, it’s worth a closer look.