A cautious portfolio with global diversification and a focus on ETFs for risk management

Report created on Mar 19, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is comprised entirely of ETFs, with a significant focus on equities at 73%, complemented by bonds at 8% and other asset classes at 3%. This composition aligns with a balanced approach, providing exposure to various markets while maintaining a cautious risk profile. Comparatively, the portfolio mirrors a typical diversified benchmark but with a slightly higher equity exposure. This balance is important for growth potential while managing risk. Consider maintaining the equity-bond mix to align with your risk tolerance, but remain open to adjusting allocations as market conditions change.

Growth Info

Historically, the portfolio has shown a CAGR (Compound Annual Growth Rate) of 9.03%, indicating solid growth over time. A maximum drawdown of -12.85% suggests the portfolio can withstand market volatility to some extent. This performance, compared to a diversified benchmark, is commendable for a cautious risk profile. It highlights the importance of diversification in smoothing returns over time. Regularly reviewing performance against personal goals and market benchmarks can help ensure the portfolio remains on track.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, indicate a wide range of potential returns. With a 5th percentile projection of -70.4% and a 67th percentile of 172.7%, the portfolio's future performance could vary significantly. This underscores the uncertainty of relying solely on historical data. While the median projection suggests positive growth, it's crucial to remain adaptable and ready to adjust the portfolio in response to changing market conditions.

Asset classes Info

  • Stocks
    73%
  • Bonds
    8%
  • Other
    3%

The portfolio's heavy allocation to stocks (73%) provides growth potential, while bonds (8%) offer stability. This asset class distribution is typical for a moderately diversified portfolio, balancing growth and risk. By maintaining a diversified mix, the portfolio can better withstand market fluctuations. Consider periodically reviewing the asset class allocation to ensure it aligns with your evolving risk tolerance and market conditions, potentially adjusting the balance between stocks and bonds as needed.

Sectors Info

  • Technology
    18%
  • Financials
    12%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Telecommunications
    6%
  • Health Care
    6%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sector-wise, the portfolio is led by technology at 18%, followed by financial services and consumer cyclicals. This sectoral spread is well-balanced, offering exposure to both growth and defensive sectors. However, the tech-heavy allocation may increase volatility during interest rate changes. Maintaining a diverse sectoral mix can help mitigate sector-specific risks. Regularly assessing sector performance and trends can guide adjustments to optimize risk and return.

Regions Info

  • North America
    31%
  • Asia Emerging
    21%
  • Japan
    10%
  • Europe Developed
    8%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is well-diversified with notable exposure to North America (31%), Asia Emerging (21%), and Japan (10%). This global reach enhances diversification, reducing reliance on any single market. However, the portfolio's limited exposure to Europe Developed and other regions might miss out on potential growth opportunities. Consider reviewing geographic allocations to ensure they align with global economic trends and personal investment goals.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    26%
  • Mid-cap
    9%

The portfolio is skewed towards mega-cap stocks (38%), with significant allocations to big (26%) and medium caps (9%). This distribution offers stability and growth, as larger companies tend to be more resilient in downturns. However, the absence of small and micro-cap exposure might limit potential high-growth opportunities. Consider diversifying market cap exposure to capture a broader range of market dynamics, while maintaining alignment with risk tolerance.

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 can potentially be optimized along the Efficient Frontier, which identifies the best possible risk-return ratio for a given set of assets. This involves adjusting current allocations to achieve the most efficient balance between risk and return. While this optimization doesn't guarantee diversification, it helps maximize returns for a given level of risk. Regularly reviewing and adjusting allocations based on the Efficient Frontier can enhance portfolio performance.

Ongoing product costs Info

  • Franklin Libertyshares ICAV - Franklin Ftse India Ucits ETF 0.19%
  • Amundi Index Solutions - Amundi Prime Japan UCITS ETF DR (C) 0.05%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • iShares VII PLC - iShares FTSE 100 ETF GBP Acc 0.07%
  • Vanguard FTSE Emerging Markets UCITS ETF USD Accumulation 0.22%
  • Vanguard EUR Eurozone Government Bond UCITS ETF EUR Accumulation 0.07%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is impressively low. Keeping costs minimal is crucial for enhancing long-term returns, as high fees can erode gains over time. This cost efficiency aligns well with best practices in portfolio management. Continue to monitor expense ratios and consider rebalancing if lower-cost alternatives become available, ensuring costs remain optimized without compromising investment quality.

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