A concentrated equity portfolio with strong us and european tilt and moderate diversification benefits

Report created on Nov 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 structure is 100% in equity ETFs, with roughly equal weights spread across 29 positions. Under the hood, though, many funds track the same or very similar indexes, especially broad US and eurozone markets. That means the “true” number of different building blocks is much lower than it appears. This matters because lots of overlapping funds add complexity without really changing the portfolio. For a balanced risk profile, this equity-only setup is on the aggressive side. Streamlining into a smaller set of broad, liquid ETFs while keeping the same overall regional and style tilt could keep the growth profile but make the portfolio easier to manage and monitor.

Growth Info

Based on the numbers you provided, the portfolio shows a strong historic compound annual growth rate (CAGR) of about 14.25%. CAGR is the “average speed” of growth per year, as if returns came in a straight line. A max drawdown of around -19% is actually quite mild for an all‑equity mix and fits a balanced-to-growth profile. Compared with common equity benchmarks, this places the portfolio in a “growth-tilted but not extreme” zone. Still, performance is heavily driven by a small number of very strong days, which is typical for stocks. As always, these results are backward-looking and can’t guarantee similar returns in future markets.

Projection Info

The Monte Carlo analysis suggests a wide range of potential outcomes, from roughly doubling the money in weak scenarios to several multiples in stronger ones. Monte Carlo simulations work by remixing historical return patterns thousands of times to create many “what if” futures. That’s helpful to see the spread of possible paths, not just a single forecast. The high percentage of positive simulations reflects the strong historical period for equities used as input data. However, simulations assume that future volatility and return patterns look somewhat like the past, which may not hold. It can still be useful for judging whether the risk level feels acceptable relative to your financial goals and time horizon.

Asset classes Info

  • Stocks
    93%

All investable assets here are stocks, with practically no allocation to bonds, cash, or alternatives. For pure long‑term growth, that’s powerful, but it can be bumpy, especially around recessions or rate shocks. Balanced profiles usually mix in some stabilizing assets to smooth the ride and reduce the chance of selling after big drops. The current setup leans more toward a growth investor who can sit through volatility. Keeping the core equity allocation but gradually introducing a small satellite in lower‑volatility assets could bring the risk score closer to a classic “balanced” profile without giving up the long‑term growth orientation of the portfolio.

Sectors Info

  • Technology
    22%
  • Financials
    16%
  • Health Care
    12%
  • Industrials
    11%
  • Energy
    8%
  • Consumer Discretionary
    6%
  • Consumer Staples
    6%
  • Telecommunications
    5%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

Sector exposure is reasonably broad: technology leads at about 22%, followed by financials, healthcare, and industrials. This is not an extreme tech bet, but it is clearly growth‑friendly and somewhat pro‑cyclical. The presence of dedicated sector funds (tech, energy, healthcare, financials, staples) layers sector tilts on top of already broad US and European ETFs. That can amplify swings when particular themes are in or out of favour. The balance across defensive areas like healthcare and staples is a plus for stability. One way to keep things simple would be to let broad market ETFs handle most of the sector mix and reserve only a small proportion for any specific tilts you strongly want to express.

Regions Info

  • North America
    48%
  • Europe Developed
    41%
  • Eurozone
    3%

Geographically, the portfolio is nicely anchored in developed markets, with roughly half in North America and a large share in Europe and the eurozone. This aligns well with common global benchmarks and gives solid exposure to major economies and global champions. The clear strength is alignment with well-established markets and regulations. The flip side is very little in emerging markets or other regions, which might limit long‑term diversification and potential catch‑up growth. For many investors, this concentration is acceptable, especially if income and spending are euro‑denominated. Anyone wanting a more global spread could consider adding a small dedicated allocation to broader world or emerging segments rather than only rotating inside US and eurozone exposures.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    31%
  • Mid-cap
    14%
  • Small-cap
    1%

Market capitalization is heavily tilted to mega and large companies, which together dominate the portfolio. That’s typical for index‑based strategies and aligns closely with global benchmarks. It’s positive because large firms tend to be more stable, transparent, and liquid, which can help in crises and lower trading frictions. The very small slice in mid and small companies means less exposure to more volatile but potentially faster‑growing businesses. This tilt supports a smoother ride but slightly lowers the chance of dramatic outperformance. Keeping a modest allocation to smaller companies via broad index exposure—rather than separate niche products—can gently increase diversification while maintaining the current overall risk score.

Redundant positions Info

  • iShares VII PLC - iShares Core EURO STOXX 50 ETF EUR Acc EUR
    Multi Units Luxembourg - Lyxor DAX (DR) UCITS ETF
    iShares MSCI EMU ESG Screened UCITS ETF EUR (Acc)
    iShares MSCI EMU ESG Enhanced UCITS ETF EUR Acc
    Xtrackers - DAX UCITS ETF
    Amundi ETF DAX UCITS ETF DR EUR
    iShares Core DAX® UCITS ETF (DE) EUR (Acc)
    Amundi Index Solutions - Amundi EURO STOXX 50 UCITS ETF-C EUR
    Xtrackers EURO STOXX 50 UCITS ETF 1C
    iShares Core MSCI EMU UCITS ETF EUR (Acc)
    Lyxor Net Zero 2050 S&P Eurozone Climate PAB (DR) UCITS ETF - Acc
    Multi Units France - Lyxor Euro Stoxx 50 (DR) UCITS ETF
    High correlation
  • SPDR S&P 500 ESG Leaders UCITS ETF
    iShares Core S&P 500 UCITS ETF USD (Acc)
    Xtrackers MSCI World ESG UCITS ETF 1C
    Xtrackers MSCI USA ESG UCITS ETF 1C EUR
    iShares Edge MSCI USA Quality Factor UCITS ETF USD (Acc)
    Xtrackers MSCI USA UCITS ETF 1C
    iShares MSCI USA SRI UCITS ETF
    High correlation
  • SPDR® S&P® U.S. Technology Select Sector UCITS ETF EUR
    iShares S&P 500 USD Information Technology Sector UCITS
    High correlation

Many of the ETFs in this portfolio are highly correlated because they track the same or almost identical indexes (multiple DAX, EURO STOXX 50, EMU, and overlapping US and ESG funds). Correlation means how often assets move together; when it’s high, owning more of them doesn’t significantly cut risk. Here, correlations are doing a good job of explaining why the diversification score is only moderate despite many line items. Removing some duplicate or near‑duplicate holdings, while keeping at least one core fund for each major exposure, could keep the same risk‑return profile with fewer moving parts. That leans into quality over quantity and makes future adjustments much easier.

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.

From a risk‑return perspective, the portfolio looks like it sits reasonably close to the efficient frontier for an all‑equity setup. The “efficient frontier” is simply the mix of available assets that gives the best trade‑off between risk and expected return. Here, the main opportunity is not changing the high‑level allocation, but cleaning up overlap between near‑identical ETFs, especially in eurozone and US exposures. Doing that can slightly improve efficiency by trimming tiny, redundant positions that add complexity but not diversification. It’s worth stressing that efficiency is about the risk‑return ratio only—it doesn’t automatically express values, ESG preferences, or behavioural comfort, which should still guide the final shape of the portfolio.

Ongoing product costs Info

  • iShares S&P 500 Consumer Staples Sector UCITS Acc 0.15%
  • Xtrackers - DAX UCITS ETF 0.09%
  • iShares MSCI EMU ESG Enhanced UCITS ETF EUR Acc 0.12%
  • Multi Units France - Lyxor Euro Stoxx 50 (DR) UCITS ETF 0.20%
  • Multi Units Luxembourg - Lyxor DAX (DR) UCITS ETF 0.15%
  • iShares Edge MSCI USA Quality Factor UCITS ETF USD (Acc) 0.20%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • iShares S&P 500 Energy Sector UCITS ETF (Acc) 0.15%
  • iShares S&P 500 Health Care Sector UCITS ETF USD (Acc) EUR 0.18%
  • iShares S&P 500 Financials Sector UCITS ETF 0.15%
  • iShares MSCI USA SRI UCITS ETF 0.23%
  • iShares MSCI EMU ESG Screened UCITS ETF EUR (Acc) 0.12%
  • SPDR S&P 500 ESG Leaders UCITS ETF 0.10%
  • SPDR® MSCI Europe Health Care UCITS ETF 0.18%
  • SPDR® MSCI Europe Energy UCITS ETF 0.18%
  • iShares Core MSCI EMU UCITS ETF EUR (Acc) 1.00%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares VII PLC - iShares Core EURO STOXX 50 ETF EUR Acc EUR 0.10%
  • Amundi Index Solutions - Amundi EURO STOXX 50 UCITS ETF-C EUR 0.09%
  • Xtrackers MSCI USA UCITS ETF 1C 0.12%
  • Xtrackers S&P 500 Equal Weight UCITS ETF 1C EUR 0.20%
  • Xtrackers EURO STOXX 50 UCITS ETF 1C 0.09%
  • Xtrackers MSCI USA ESG UCITS ETF 1C EUR 0.20%
  • Xtrackers MSCI World ESG UCITS ETF 1C 0.25%
  • Lyxor Net Zero 2050 S&P Eurozone Climate PAB (DR) UCITS ETF - Acc 0.20%
  • SPDR® S&P® U.S. Technology Select Sector UCITS ETF EUR 0.15%
  • Weighted costs total (per year) 0.17%

The overall total expense ratio (TER) of about 0.17% is impressively low for such a broad ETF mix. Low costs are one of the few things fully under investor control and compound in your favour over time, just like returns do. This aligns well with best practices and supports better long‑term performance versus higher‑fee products. One outlier is a core EMU fund with a much higher TER than the rest. Because many other cheaper funds in the portfolio cover similar territory, there’s room to simplify and keep costs at the lower end of the spectrum. Continuing to favour broad, low‑fee, physically replicated ETFs keeps the cost advantage intact.

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