Balanced Risk Portfolio with High Diversification and Strong Technology Focus

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

Balanced Investors

This portfolio suits a balanced investor with a moderate risk tolerance, seeking growth and diversification. It is ideal for those with a medium to long-term investment horizon, aiming to benefit from global equity exposure while managing risk with defensive assets like gold. The investor values innovation and growth potential, particularly in technology and digital assets. While not focused on income, this investor appreciates some dividend yield. A willingness to accept market volatility in pursuit of higher returns is essential, along with a commitment to regular portfolio reviews.

Positions

  • Vanguard FTSE All-World UCITS
    VWRL - IE00B3RBWM25
    60.00%
  • WisdomTree Artificial Intelligence UCITS ETF - USD Acc
    INTL - IE00BDVPNG13
    14.00%
  • iShares Physical Gold ETC
    SGLN - IE00B4ND3602
    14.00%
  • VanEck Digital Assets Equity UCITS ETF A USD Acc
    DAGB - IE00BMDKNW35
    12.00%

The portfolio is composed of four ETFs with a significant allocation to the Vanguard FTSE All-World UCITS, making up 60% of the portfolio. This fund offers broad exposure to global equities, providing a solid foundation for diversification. The remaining 40% is divided among niche ETFs focusing on artificial intelligence, digital assets, and gold, each contributing to the portfolio's thematic and defensive characteristics. This setup indicates a balanced approach, aiming to capture growth from innovative sectors while maintaining a hedge with gold. The composition reflects a strategic mix of growth and stability.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 12.52%, indicating strong performance over time. However, it has also experienced a maximum drawdown of -22.4%, suggesting some vulnerability during market downturns. The concentrated nature of returns, where 90% of gains occurred on just 13 days, highlights the portfolio's reliance on specific market movements. This performance suggests that while the portfolio has been lucrative, it carries a degree of volatility. It is crucial to maintain a long-term perspective to weather short-term fluctuations and capitalize on growth.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was modeled with a hypothetical initial investment. The simulation indicates a wide range of potential outcomes, with a 5th percentile end value of -80.5% and a 67th percentile end value of 403.02%. The median projection suggests a 140.83% increase, with 723 simulations showing positive returns. This analysis reflects the inherent uncertainty in financial markets and underscores the importance of diversification to mitigate risk. It is crucial to stay informed and periodically reassess the portfolio's alignment with financial goals.

Asset classes

  • Stocks
    86%
  • Other
    14%
  • Cash
    0%
  • No data
    0%

The portfolio is heavily weighted towards stocks, comprising approximately 86% of the asset allocation. This signifies a growth-oriented strategy, capitalizing on potential equity market gains. The gold allocation at 14% offers a defensive component, providing a hedge against market volatility and inflation. The absence of significant cash or bond holdings indicates a focus on capital appreciation over income generation or capital preservation. To maintain a balanced risk profile, it may be beneficial to consider introducing more fixed-income assets, which can provide stability and reduce overall portfolio volatility.

Sectors

  • Technology
    31%
  • Financials
    17%
  • Consumer Discretionary
    7%
  • Health Care
    7%
  • Industrials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

The sector allocation reveals a strong emphasis on technology, which accounts for nearly 31% of the portfolio. This concentration reflects a bet on the continued growth and innovation within the tech industry. Financial services and consumer cyclicals also have significant allocations, contributing to the portfolio's exposure to economic growth. However, sectors like utilities and real estate are underrepresented, which could limit defensive capabilities during economic downturns. Diversifying across more sectors could enhance resilience and reduce sector-specific risks, ensuring a more balanced approach to capturing market opportunities.

Regions

  • North America
    60%
  • Europe Developed
    11%
  • Asia Emerging
    5%
  • Japan
    4%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly focused on North America, representing nearly 60% of the allocation. This indicates a reliance on the performance of the U.S. and Canadian markets. Europe Developed and Asia Emerging also have notable allocations, providing some international diversification. However, regions like Latin America and Europe Emerging are minimally represented, potentially missing out on growth opportunities in these areas. While North American markets have historically been strong, increasing geographic diversification could help mitigate regional risks and capture growth from other parts of the world.

Dividends

  • Vanguard FTSE All-World UCITS 1.40%
  • Weighted yield (per year) 0.84%

The portfolio's dividend yield stands at 0.84%, with the Vanguard FTSE All-World UCITS contributing a yield of 1.4%. This indicates that while the portfolio is not primarily focused on income generation, it does offer some level of dividend income. The low overall yield reflects the growth-oriented nature of the holdings, particularly the focus on technology and digital assets, which typically reinvest earnings for expansion. For investors seeking higher income, increasing exposure to dividend-paying stocks or income-focused ETFs could enhance cash flow without compromising growth potential.

Ongoing product costs

  • VanEck Digital Assets Equity UCITS ETF A USD Acc 0.65%
  • WisdomTree Artificial Intelligence UCITS ETF - USD Acc 0.40%
  • iShares Physical Gold ETC 0.25%
  • Vanguard FTSE All-World UCITS 0.22%
  • Weighted costs total (per year) 0.30%

The portfolio's total expense ratio (TER) is 0.3%, which is relatively low and reflects cost-effective management. The Vanguard FTSE All-World UCITS ETF, with a TER of 0.22%, significantly contributes to keeping costs down. The VanEck Digital Assets Equity UCITS ETF has the highest cost at 0.65%, which is expected given its niche focus. Keeping investment costs low is crucial as they can erode returns over time. Regularly reviewing and optimizing the cost structure can help maximize net returns. Consideration of lower-cost alternatives might also be beneficial if they align with the portfolio's objectives.

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 optimization chart suggests potential for improvement by adjusting the asset mix along the efficient frontier. By increasing exposure to less correlated assets, the portfolio could achieve a more optimal risk-return balance. Moving towards bonds or alternative investments could provide stability, making the portfolio more conservative. Conversely, increasing equity exposure might enhance returns but also raise risk levels. Before optimizing, it's essential to ensure alignment with financial goals and risk tolerance. Regularly revisiting the portfolio's composition and performance metrics can help maintain its efficiency and effectiveness.

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