Balanced and moderately diversified portfolio focusing on global and US equities with low costs

Report created on Jul 21, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is evenly split between the iShares Core MSCI World UCITS ETF and the Vanguard S&P 500 UCITS ETF, allocating 50% to each. This structure emphasizes a strong focus on equities, particularly highlighting a preference for broad market exposure through the MSCI World Index alongside a specific bet on the US market via the S&P 500. Such a composition suggests a strategy aiming to capture global market returns while doubling down on the historically robust US equity market.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.72%, with a maximum drawdown of -33.72%. These figures indicate a relatively high return potential but also underscore the risk of significant value fluctuations during market downturns. The performance is notably concentrated, with 90% of returns generated on just 17 days, highlighting the impact of short-term, high-gain periods on overall performance.

Projection Info

Monte Carlo simulations, using historical data to project future outcomes, suggest a wide range of potential returns for this portfolio. With 995 out of 1,000 simulations showing positive returns, the median projected growth is substantial. However, the reliance on historical data means these projections do not guarantee future performance, especially as market conditions evolve.

Asset classes Info

  • Stocks
    100%

With 100% of the portfolio allocated to stocks, diversification across asset classes is minimal. This singular focus on equities enhances growth potential but also increases vulnerability to market volatility. Diversifying across different asset classes could provide a buffer against stock market fluctuations.

Sectors Info

  • Technology
    31%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The sectoral allocation leans heavily towards technology, financial services, and consumer cyclicals, which are sectors known for their high growth potential. However, this concentration also exposes the portfolio to sector-specific risks, such as regulatory changes or economic cycles affecting these industries disproportionately.

Regions Info

  • North America
    87%
  • Europe Developed
    8%
  • Japan
    3%
  • Australasia
    1%
  • Asia Developed
    1%

The geographic allocation is heavily skewed towards North America, particularly the US, which constitutes 87% of the portfolio. While this concentration has historically offered strong returns, it also limits exposure to potential growth in other regions and increases susceptibility to US-centric economic and political events.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    35%
  • Mid-cap
    17%
  • Small-cap
    1%

The portfolio's emphasis on mega and big cap stocks (82% combined) aligns with its focus on stability and growth potential from established companies. However, the minimal exposure to small caps limits opportunities for outsized gains from emerging companies.

Redundant positions Info

  • iShares Core MSCI World UCITS ETF USD (Acc) EUR
    Vanguard S&P 500 UCITS Acc
    High correlation

The high correlation between the iShares Core MSCI World UCITS ETF and the Vanguard S&P 500 UCITS ETF indicates redundancy, as both funds cover many of the same large-cap US equities. This overlap dilutes the diversification benefits theoretically offered by holding both ETFs.

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.

Click on the colored dots to explore allocations.

The current portfolio could benefit from optimization to improve the risk-return profile. Reducing the overlap between the two ETFs could enhance diversification without sacrificing the portfolio's growth objectives. Exploring opportunities to include assets with lower correlation to the current holdings might also reduce volatility and improve long-term performance.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) EUR 0.20%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.14%

The total expense ratio (TER) of 0.14% is impressively low, maximizing the potential for net returns. Keeping costs low is crucial for long-term investment success, especially in a portfolio focused solely on ETFs, where management fees can significantly impact overall performance.

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