Cautious Broadly Diversified Portfolio with Strong Geographic Exposure and Moderate Historical Performance

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Cautious Investors

This portfolio is suitable for cautious investors who prioritize stability and moderate growth. They typically have a long-term investment horizon and a low to moderate risk tolerance. These investors seek to balance potential returns with risk management, aiming for steady capital appreciation rather than aggressive growth. They value diversification and cost efficiency, focusing on broad market exposure to mitigate risks associated with individual sectors or regions. Their investment goals often include preserving capital while achieving modest growth over time.

Positions

  • Amundi Index Solutions - Amundi Prime Global UCITS ETF DR GBP
    PRIW - LU1931974692
    50.00%
  • JPM Global Equity Multi-Factor UCITS ETF USD Acc GBP
    JPLG - IE00BJRCLL96
    30.00%
  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income
    VAGP - IE00BG47KG48
    13.00%
  • Amundi Index Solutions - Amundi Index FTSE EPRA NAREIT Global UCITS ETF DR
    EPRA - LU1437018838
    7.00%

The portfolio is composed of four ETFs, with a strong focus on global exposure. The largest holding is the Amundi Prime Global ETF, making up half of the portfolio. This is complemented by the JPM Global Equity Multi-Factor ETF and the Vanguard Global Aggregate Bond ETF, which provide additional diversification. The Amundi FTSE EPRA NAREIT Global ETF adds a touch of real estate exposure. The composition reflects a cautious investment strategy with a focus on broad diversification, suitable for investors seeking moderate growth with controlled risk.

Growth Info

Historically, this portfolio has shown a respectable compound annual growth rate (CAGR) of 9.08%, with a maximum drawdown of -22.48%. This indicates that while the portfolio has the potential for growth, it can also experience significant declines during market downturns. The days that make up 90% of returns are limited, suggesting that the portfolio's performance is driven by a few key periods. This historical performance aligns with a cautious risk profile, offering a balance between growth and risk management.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was analyzed. This simulation provides a range of possible outcomes based on historical data. The median projection shows a potential portfolio growth of 109.86%, with a 67th percentile projection at 165.56%. However, there's a 5th percentile risk of a -19.68% decline. With 917 simulations showing positive returns, the annualized return across all simulations is 6.2%. This analysis highlights the potential for steady growth, albeit with some downside risk.

Asset classes Info

  • Stocks
    87%
  • Bonds
    13%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is predominantly invested in stocks, accounting for approximately 87%, with bonds making up about 13%. This allocation is typical for a cautious investor seeking moderate risk exposure. The limited cash and other asset allocations suggest a focus on maximizing returns through equities and fixed-income investments. This asset class distribution provides a balance between growth and stability, aligning with the portfolio's cautious risk classification.

Sectors Info

  • Technology
    16%
  • Financials
    11%
  • Real Estate
    11%
  • Health Care
    9%
  • Industrials
    8%
  • Consumer Discretionary
    8%
  • Consumer Staples
    6%
  • Telecommunications
    6%
  • Utilities
    4%
  • Energy
    4%
  • Basic Materials
    4%

Sector allocation is well-diversified, with a notable emphasis on technology, financial services, and real estate. These sectors account for a significant portion of the portfolio, with technology leading at over 16%. This diversification across sectors helps mitigate sector-specific risks and provides exposure to various economic segments. A balanced sector allocation supports the portfolio's objective of achieving steady growth while maintaining a cautious risk profile.

Regions Info

  • North America
    64%
  • Europe Developed
    13%
  • Japan
    6%
  • Australasia
    2%
  • Asia Developed
    1%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America, which makes up nearly 64% of the allocation. This is followed by Europe and Japan, providing additional diversification. The exposure to developed markets aligns with the cautious risk profile, offering stability and growth potential. The limited allocation to emerging markets reflects a conservative approach, minimizing exposure to higher volatility regions. This geographic distribution supports a balanced investment strategy with a focus on stable returns.

Dividends Info

  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income 3.00%
  • Weighted yield (per year) 0.39%

The portfolio's dividend yield is modest, with the Vanguard Global Aggregate Bond ETF contributing a 3.0% yield. The overall portfolio yield is 0.39%, reflecting the emphasis on growth rather than income generation. While dividends can provide a steady income stream, this portfolio's focus is more on capital appreciation. Investors seeking higher income may need to consider additional income-focused investments to complement this portfolio's growth-oriented strategy.

Ongoing product costs Info

  • Amundi Index Solutions - Amundi Index FTSE EPRA NAREIT Global UCITS ETF DR 0.24%
  • Amundi Index Solutions - Amundi Prime Global UCITS ETF DR GBP 0.05%
  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income 0.10%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is low, at 0.05%, which is advantageous for long-term growth. The individual ETFs have varying costs, with the Amundi Prime Global ETF being the most cost-effective. Keeping costs low is essential for maximizing net returns, especially for cautious investors. The cost efficiency of this portfolio aligns well with its objective of providing steady growth with minimal expenses, allowing more of the investment returns to compound over time.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

The portfolio is already broadly diversified, suggesting limited need for immediate optimization. However, investors can explore the efficient frontier to adjust risk levels. Moving up the frontier can increase risk for potentially higher returns, while moving down can reduce risk for more conservative growth. Before optimizing, it might be beneficial to review personal financial goals and risk tolerance. This ensures alignment between the portfolio's structure and the investor's objectives, providing a clear path for future adjustments if necessary.

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