Globally diversified stock portfolio with balanced risk and strong low volatility and value tilts
Report created on May 3, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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EU iShares Core MSCI World UCITS ETF USD (Acc) EUR
EUNL - IE00B4L5Y983 85.00% -
XM Xtrackers MSCI Emerging Markets UCITS ETF 1C
XMME - IE00BTJRMP35 15.00%
The portfolio is strikingly simple, with just two broad equity ETFs: roughly 85% in developed markets and 15% in emerging markets. Everything is invested in stocks, so there is full participation in equity market moves without the dampening effect of bonds or cash. This streamlined structure makes it very transparent and easy to manage, which is a big plus for many long-term investors. The main takeaway is that the risk level comes almost entirely from global stock markets, not from complex niche products. Anyone using this setup should feel comfortable with equity-style ups and downs and be intentional about not holding stabilizing assets here.
Growth
From mid‑2017 to early 2026, $1,000 grew to about $2,357, a compound annual growth rate (CAGR) of 10.22%. CAGR is like average speed on a road trip: it smooths out all the bumps to show steady annual progress. This return slightly lagged the global market and more noticeably trailed the U.S. market, which has been unusually strong. Max drawdown, at about ‑33%, was very similar to both benchmarks, meaning the portfolio fell about as far in bad times as the broader markets. The key point is that you’re getting near‑global‑market performance with familiar equity volatility, which is very much in line with a balanced‑equity risk profile.
Asset classes
- Stocks 100%
All assets are in stocks, with no bonds, cash, or alternatives. That means zero built‑in cushion from safer assets when markets drop, but also no drag from lower‑return holdings when markets surge. A 100% equity mix typically suits people with long horizons and the ability to tolerate large, temporary drawdowns. Relative to “classic” balanced mixes that blend stocks and bonds, this is clearly more growth‑oriented and more volatile. The positive is that the equity allocation is well diversified across global markets rather than being narrow or speculative. Anyone using this as a core holding might pair it with separate low‑risk assets if a smoother ride is desired.
Sectors
- Technology 28%
- Financials 17%
- Industrials 11%
- Consumer Discretionary 9%
- Telecommunications 9%
- Health Care 9%
- Consumer Staples 5%
- Energy 4%
- Basic Materials 4%
- Utilities 3%
- Real Estate 2%
Sector exposure is broad, led by technology, then sizeable stakes in financials, industrials, and a mix of other economic areas. This spread looks similar to common global equity benchmarks, which is a strong sign of healthy diversification. A meaningful tech tilt means performance can be sensitive to changes in interest rates or innovation cycles, as tech often reacts strongly to both good and bad news. At the same time, exposure to defensives like health care and consumer staples provides some balance when growth sectors struggle. Overall, the sector mix is well‑balanced and aligns closely with global standards, supporting resilient long‑term participation in many parts of the economy.
Regions
- North America 63%
- Europe Developed 14%
- Asia Developed 7%
- Asia Emerging 6%
- Japan 5%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio tilts strongly toward North America, with additional exposure to developed Europe, developed Asia, Japan, and a smaller slice in emerging regions. This pattern is broadly consistent with global market capitalization, where North America dominates. The emerging markets allocation introduces exposure to different growth drivers and currencies, which can behave very differently from developed markets over time. This blend helps avoid putting all geographic risk into a single region. The alignment with global norms is beneficial: it reduces the chance of big country‑specific bets and instead lets worldwide economic growth and innovation drive long‑term results.
Market capitalization
- Mega-cap 50%
- Large-cap 34%
- Mid-cap 15%
Most of the portfolio sits in mega‑cap and large‑cap companies, with a smaller portion in mid‑caps and effectively minimal small‑cap exposure. Larger companies tend to be more stable, more liquid, and better covered by analysts, which can make their price swings somewhat more predictable than tiny firms. However, smaller companies sometimes offer higher growth potential over long stretches, at the cost of higher volatility. This large‑cap focus is typical for broad index funds and helps keep the risk profile moderate for an all‑equity allocation. The trade‑off is less exposure to potentially faster‑growing but bumpier smaller businesses.
True holdings
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NV NVIDIA Corporation 4.29%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AA Apple Inc 3.87%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
MS Microsoft Corporation 2.76%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AM Amazon.com Inc 2.01%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 2.00%
Part of fund(s):- Xtrackers MSCI Emerging Markets UCITS ETF 1C
-
GO Alphabet Inc Class A 1.81%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
GO Alphabet Inc Class C 1.51%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AV Broadcom Inc 1.43%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
ME Meta Platforms Inc. 1.41%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
TS Tesla Inc 1.13%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- iShares Core MSCI World UCITS ETF USD (Acc) EUR
- Top 10 total 22.22%
Looking through the ETFs, the top exposures are familiar mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, and Taiwan Semiconductor. These positions appear via the funds, not as individual stocks, and together they already represent a meaningful slice of the equity risk. Overlap between funds means a single company can influence results more than it seems from headline ETF weights, even though only top‑10 holdings are captured here. This concentration in big global leaders isn’t unusual in broad indices, but it does mean results will be strongly linked to how these giants perform. Being aware of that influence helps set realistic expectations.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows a clear tilt toward value and especially toward low volatility. Factors are like underlying “traits” of stocks — value, size, momentum, quality, yield, and low volatility — that research links to long‑term returns. A high value score means the portfolio leans somewhat toward cheaper stocks relative to fundamentals, which can help when expensive growth names cool off. The very high low‑volatility tilt suggests a preference for steadier stocks that historically move less than the market, potentially softening drawdowns. This combination can create a smoother ride in choppy markets, though it may lag in sharp, speculative rallies driven by high‑beta, expensive names.
Risk contribution
-
iShares Core MSCI World UCITS ETF USD (Acc) EUR
Weight: 85.00% 85.3% -
Xtrackers MSCI Emerging Markets UCITS ETF 1C
Weight: 15.00% 14.7%
Risk contribution measures how much each holding adds to overall ups and downs, which can differ from its weight. Here, risk contribution is almost perfectly aligned with weights: the developed markets ETF contributes about 85% of risk and the emerging markets ETF about 15%. That tells us there are no hidden hot spots where a small position is secretly driving most of the volatility. It also reflects that both funds are broad, diversified vehicles rather than concentrated niche bets. If desired, adjusting the emerging markets weight up or down would be a straightforward way to dial total portfolio risk slightly higher or lower while keeping the structure simple.
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.
On the risk‑return chart, the current mix sits very close to the efficient frontier, which is the curve showing the best possible expected return for each risk level using the existing holdings. The Sharpe ratio of 0.57 is slightly below the maximum of 0.67 available with a different mix of the same two ETFs, but the difference is modest. Being near the frontier means the allocation is already quite efficient, with no obvious dead weight. Any improvements would come from fine‑tuning the split between developed and emerging markets rather than adding new products. That’s a reassuring sign that the structure is sensible and well‑aligned with its risk level.
Ongoing product costs
- iShares Core MSCI World UCITS ETF USD (Acc) EUR 0.20%
- Xtrackers MSCI Emerging Markets UCITS ETF 1C 0.18%
- Weighted costs total (per year) 0.20%
Total ongoing fees are about 0.20% per year, which is impressively low for a globally diversified equity setup. The Total Expense Ratio (TER) is like a small haircut on returns each year; the lower it is, the more of the market’s growth you keep. Over decades, even tiny fee differences compound into meaningful sums. Being this close to rock‑bottom cost levels supports better long‑term performance without requiring any extra risk. This cost profile is a real strength: it aligns well with best practices for long‑term investing and leaves very little room for improvement on the fee side using similar broad‑market building blocks.
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