A balanced portfolio with a strong emphasis on technology and global diversification

Report created on Dec 9, 2024

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 equally divided between two ETFs: iShares NASDAQ 100 and iShares Core MSCI World. This composition reflects a focus on both high-growth technology sectors and broader global market exposure. The NASDAQ 100 ETF is heavily weighted towards tech companies, while the MSCI World ETF offers a more diversified approach across different sectors. This blend provides an opportunity to capture growth in the tech industry while maintaining exposure to a wider range of global economic activities. To enhance diversification, consider incorporating additional asset classes like bonds or real estate.

Growth Info

Historically, the portfolio has demonstrated robust performance, with a compound annual growth rate (CAGR) of 16.14%. This indicates strong growth over time, albeit with a maximum drawdown of -25.23%, highlighting potential volatility. Understanding past performance helps set expectations for future returns, though it does not guarantee them. The portfolio's performance suggests it has capitalized on the growth of the technology sector and global markets. However, to mitigate potential downturns, consider strategies such as rebalancing or adding defensive assets to reduce volatility.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance is projected across 1,000 scenarios. These simulations estimate potential outcomes by analyzing historical data, providing a range of possible returns. The median projection suggests a growth of 703.23%, with a 5th percentile outcome of 164.14%. While these projections offer a glimpse into potential future performance, they are not predictions. They highlight the uncertainty inherent in investing, emphasizing the importance of maintaining a diversified and adaptable investment strategy to navigate various market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily concentrated in stocks, accounting for 99.74% of its allocation. This high exposure to equities suggests a focus on capital appreciation but also introduces significant market risk. Limited allocations to other asset classes, such as bonds or cash, reduce diversification and may increase vulnerability to market volatility. Diversifying across asset classes can help balance risk and return, providing stability during market downturns. Consider incorporating fixed-income securities or alternative investments to achieve a more balanced risk profile.

Sectors Info

  • Technology
    39%
  • Consumer Discretionary
    12%
  • Telecommunications
    12%
  • Financials
    8%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio shows a notable concentration in the technology sector, which comprises 38.74% of the total allocation. While this sector has driven significant growth, such concentration can increase exposure to sector-specific risks. Other sectors like consumer cyclicals and communication services also hold substantial weight, adding some balance. To mitigate risks associated with sector concentration, diversifying into underrepresented sectors such as utilities or real estate could enhance stability and reduce dependency on the tech industry's performance.

Regions Info

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

Geographically, the portfolio is heavily weighted towards North America, with 87.07% exposure. This reflects a strong reliance on the U.S. market, which can limit diversification benefits and increase susceptibility to regional economic fluctuations. While North America has historically delivered strong returns, expanding exposure to other regions like emerging markets or Europe could enhance diversification. This broader geographic allocation can help capture growth opportunities in different economic environments and reduce the impact of regional downturns.

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 portfolio's current allocation can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the weightings between existing assets to achieve a more efficient portfolio. By analyzing historical performance and risk metrics, the Efficient Frontier helps identify an optimal allocation that maximizes returns for a given level of risk. Consider rebalancing the portfolio periodically to maintain alignment with the Efficient Frontier, ensuring it remains well-positioned to achieve its investment objectives.

Ongoing product costs Info

  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Weighted costs total (per year) 0.28%

The total expense ratio (TER) for the portfolio is 0.28%, which is relatively low and favorable for long-term growth. Lower costs mean more of your investment returns are retained, enhancing compounding over time. While the current costs are competitive, it's always beneficial to regularly review and compare with alternative investment options. Ensuring that the portfolio remains cost-efficient can maximize net returns. Consider exploring other low-cost ETFs or funds that align with your investment strategy while maintaining a focus on minimizing fees.

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