Balanced Portfolio with High North American Exposure and Strong Historical Performance

Report created on Nov 14, 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 consists of two ETFs: Vanguard S&P 500 UCITS Acc and Vanguard FTSE Developed World UCITS ETF USD Accumulation. With 51% allocated to the S&P 500 and 49% to the FTSE Developed World, the portfolio is moderately diversified, focusing heavily on equities. This composition reflects a balanced approach, with a risk score of 4 out of 7, indicating moderate risk. While the portfolio is concentrated in stocks, it offers exposure to a broad range of sectors and geographies. It's suitable for investors seeking growth with a moderate risk appetite.

Growth Info

Historically, the portfolio has demonstrated strong performance, achieving a compound annual growth rate (CAGR) of 15.07%. Despite a maximum drawdown of -25.51%, which indicates the largest peak-to-trough decline, the portfolio has recovered well. This performance suggests resilience and potential for substantial growth over time. The portfolio's ability to generate significant returns on a relatively consistent basis makes it attractive for investors who can tolerate some volatility. However, it's essential to remain aware of market fluctuations and be prepared for potential downturns.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was assessed. This simulation predicts a range of possible outcomes by randomly sampling returns, providing insight into potential future returns. The results suggest a median end portfolio value of 576.91%, with a 95% probability of a minimum return of 125.54%. The high number of simulations with positive returns (995 out of 1,000) indicates a strong likelihood of future growth. However, it's important to remember that past performance is not a guarantee of future results, and market conditions can change.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards equities, with 99.97% allocated to stocks. This concentration in a single asset class can lead to increased volatility, as stock market fluctuations can significantly impact the portfolio's value. While equities offer potential for high returns, they also come with higher risk compared to other asset classes like bonds or cash. To mitigate risk, consider diversifying into other asset classes, which can provide stability during market downturns. Balancing the portfolio with fixed-income securities or alternative investments may enhance long-term risk-adjusted returns.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    4%
  • Utilities
    3%
  • Basic Materials
    3%
  • Real Estate
    2%

The portfolio is diversified across several sectors, with the largest allocations in Technology (29.68%), Financial Services (14.29%), and Healthcare (11.23%). This sector distribution indicates a focus on growth-oriented industries, which have historically driven strong returns. However, the concentration in specific sectors can expose the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. To reduce these risks, consider further diversifying into underrepresented sectors. A more balanced sector allocation can help cushion against sector-specific downturns and provide a smoother return profile.

Regions Info

  • North America
    86%
  • Europe Developed
    8%
  • Japan
    3%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily concentrated in North America, accounting for 86.39% of the allocation. This significant exposure to a single region can lead to increased sensitivity to economic and political events in that area. While North America has been a strong performer historically, diversifying into other regions can help mitigate regional risks and capture growth opportunities in other markets. Consider gradually increasing exposure to emerging markets or other developed regions to enhance geographic diversification and reduce dependency on North American markets.

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 optimization chart suggests opportunities for improvement, particularly in diversification. By moving along the efficient frontier, investors can achieve a more risk-adjusted portfolio. To lower risk, consider incorporating bonds or alternative investments, which can provide stability. For a riskier approach, increase exposure to equities or growth-focused sectors. The key is to find a balance that aligns with individual risk tolerance and financial goals. Before optimizing, ensure the portfolio's current composition meets long-term objectives and risk appetite, then adjust as needed for optimal performance.

Ongoing product costs Info

  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low costs, with the Vanguard S&P 500 UCITS Acc ETF having a Total Expense Ratio (TER) of 0.07%. This low-cost structure is advantageous, as it helps maximize net returns by minimizing fees. Keeping investment costs low is a crucial element of successful investing, allowing more of the portfolio's returns to be reinvested and compounded over time. While the current cost structure is favorable, it's essential to remain vigilant about any changes in fees and consider cost-effective alternatives if necessary to maintain a cost-efficient portfolio.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey