Conservative Portfolio with Moderate Diversification and Low Costs

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

Conservative Investors

This portfolio is suitable for conservative investors who prioritize capital preservation and steady growth. These investors typically have a low risk tolerance and prefer a diversified approach to minimize potential losses. Their investment horizon is often long-term, allowing them to weather market fluctuations while focusing on gradual wealth accumulation. Potential goals for this type of investor include maintaining financial stability, generating a modest income, and achieving long-term growth without exposing themselves to significant market volatility.

Positions

  • Xtrackers II Eurozone Government Bond UCITS ETF 1C EUR
    DBXN - LU0290355717
    55.00%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    VWCE - IE00BK5BQT80
    30.00%
  • Invesco Physical Gold ETC EUR
    8PSG - IE00B579F325
    7.50%
  • iShares Diversified Commodity Swap UCITS ETF
    SXRS - IE00BDFL4P12
    7.50%

The portfolio consists of four main positions, with a significant allocation in Eurozone government bonds, accounting for 55% of the total. The portfolio also includes the Vanguard FTSE All-World ETF, which provides global equity exposure at 30%, and smaller allocations to gold and diversified commodities, each at 7.5%. This composition reflects a conservative approach with a focus on stability and moderate growth potential. To enhance diversification, consider increasing exposure to different asset classes or sectors that align with the investment goals and risk tolerance.

Growth

Historically, the portfolio has achieved a compound annual growth rate (CAGR) of 4.86%, indicating steady growth over time. The maximum drawdown of -14.89% suggests a moderate level of risk, which is consistent with the conservative risk classification. This performance highlights the importance of a balanced approach in achieving long-term growth while managing risk. To improve performance, consider periodically reviewing and rebalancing the portfolio to ensure it aligns with changing market conditions and personal investment objectives.

Projection

A Monte Carlo simulation, using 1,000 scenarios, projects a median portfolio value increase of 165.21%, with an annualized return of 8.07%. This simulation provides a range of potential outcomes, helping to understand the portfolio's future performance under different market conditions. The high percentage of simulations with positive returns (97.1%) suggests a favorable outlook. To capitalize on this potential, maintain a long-term perspective and regularly assess the portfolio's alignment with financial goals and risk tolerance.

Asset classes

  • Bonds
    55%
  • Stocks
    30%
  • Other
    7%
  • Cash
    1%
  • No data
    0%

The portfolio is predominantly invested in bonds, making up approximately 54.6% of the total allocation, followed by stocks at 30%. The remaining allocation is in other asset classes, including commodities and gold. This asset class distribution reflects a conservative strategy aimed at preserving capital while seeking moderate growth. To enhance diversification and reduce potential risks, consider exploring additional asset classes that complement the existing portfolio structure and align with long-term investment goals.

Sectors

  • Technology
    7%
  • Financials
    5%
  • Health Care
    3%
  • Consumer Discretionary
    3%
  • Industrials
    3%
  • Telecommunications
    2%
  • Consumer Staples
    2%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation is diverse, with technology, financial services, and healthcare being the most significant sectors. However, other sectors such as consumer cyclicals and industrials also contribute to the overall composition. This sector allocation provides a balanced exposure to different economic areas, reducing the impact of sector-specific risks. To further optimize the sector allocation, consider periodically reviewing the portfolio to ensure it remains aligned with market trends and personal investment objectives.

Regions

  • North America
    19%
  • Europe Developed
    5%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    1%
  • Australasia
    1%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio has a strong focus on North America, which accounts for 19.3% of the allocation. Other regions, such as Europe and Asia, have smaller allocations. This geographic distribution offers exposure to developed markets while maintaining a conservative risk profile. To enhance geographic diversification, consider increasing exposure to emerging markets or other regions that align with the investment strategy and risk tolerance, potentially improving growth potential.

Dividends

While the portfolio does not provide a specific dividend yield, the inclusion of dividend-paying assets can contribute to overall returns. Dividends can provide a steady income stream and help offset potential market fluctuations. To enhance the portfolio's income potential, consider incorporating assets with a history of stable or growing dividends, ensuring they align with the overall investment strategy and risk tolerance.

Ongoing product costs

  • Invesco Physical Gold ETC EUR 0.12%
  • Xtrackers II Eurozone Government Bond UCITS ETF 1C EUR 0.10%
  • iShares Diversified Commodity Swap UCITS ETF 0.19%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, indicating low investment costs. This low-cost structure is beneficial for long-term investors, as it minimizes the impact of fees on overall returns. To maintain low costs, continue to focus on cost-effective investment options and periodically review the portfolio to ensure it remains aligned with financial goals and risk tolerance. Additionally, consider exploring opportunities to further reduce costs through tax-efficient strategies or low-cost investment vehicles.

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