A cautious yet globally diversified portfolio with a solid focus on technology and large-cap stocks

Report created on Feb 9, 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 composed of a mix of ETFs, with a strong emphasis on global equity exposure. The Vanguard FTSE All-World UCITS ETF makes up 55% of the portfolio, providing broad global diversification. The iShares MSCI EM Asia ETF adds an emerging markets tilt with 25%, while the Invesco EQQQ NASDAQ-100 ETF focuses on tech-heavy U.S. equities at 15%. A small allocation to physical gold at 5% adds a hedge against market volatility. This composition aligns well with a cautious risk profile, offering a diversified global equity exposure with a slight emphasis on growth.

Growth Info

Historically, the portfolio has delivered a CAGR of 11.61%, indicating robust growth over time. This performance is noteworthy, especially given the cautious risk profile. The maximum drawdown of -14.09% suggests moderate volatility, which is consistent with the portfolio's diversified nature. While past performance doesn't guarantee future results, this track record demonstrates the portfolio's ability to capture market gains while managing downside risks. Investors should consider maintaining this balanced approach to continue benefiting from potential growth while managing risk exposure.

Projection Info

The Monte Carlo simulation, which uses historical data to model potential future outcomes, predicts an annualized return of 14.32%. This analysis suggests a broad range of outcomes, with the 5th percentile showing modest growth and the 67th percentile indicating substantial potential gains. While simulations provide insight into possible future performance, they are not definitive. Investors should use these projections as a guide, understanding that market conditions can change. Regularly reviewing and adjusting the portfolio may help align with evolving market trends and personal investment goals.

Asset classes Info

  • Stocks
    95%

The portfolio is heavily weighted towards stocks, comprising 95% of the allocation. This high equity exposure suggests a focus on growth, which is typical for investors seeking long-term capital appreciation. The lack of bonds and other asset classes may limit diversification benefits during market downturns. While the current allocation aligns with a growth-oriented strategy, introducing a small allocation to bonds or alternative assets could enhance stability and reduce volatility, especially for investors with lower risk tolerance or shorter investment horizons.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Telecommunications
    9%
  • Industrials
    8%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

With a 30% allocation to technology, the portfolio is significantly tech-heavy, followed by financial services and consumer cyclicals. This sector concentration can lead to higher volatility, especially during periods of tech sector fluctuations. However, it also positions the portfolio to benefit from the growth potential of innovative industries. Investors should be aware of the risks associated with sector concentration and consider whether this aligns with their risk tolerance. Diversifying into more defensive sectors, such as healthcare or utilities, could help balance the portfolio and reduce sector-specific risks.

Regions Info

  • North America
    52%
  • Asia Emerging
    19%
  • Asia
    11%
  • Europe Developed
    8%
  • Japan
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic allocation is predominantly in North America at 52%, with significant exposure to Asia Emerging and Developed markets. This distribution provides a mix of developed and emerging market exposure, enhancing diversification. However, the underweighting in Europe and other regions may limit global diversification benefits. To optimize geographic diversification, investors might consider increasing exposure to underrepresented regions, which could provide additional growth opportunities and reduce reliance on any single market's performance.

Market capitalization Info

  • Mega-cap
    50%
  • Large-cap
    33%
  • Mid-cap
    11%

The portfolio is heavily skewed towards mega and big-cap stocks, which make up 83% of the allocation. This focus on large-cap companies provides stability and lower volatility compared to smaller companies. However, it may also limit potential high growth opportunities found in medium or small-cap stocks. Investors seeking to enhance growth potential might consider incorporating more mid or small-cap stocks, which can offer higher returns albeit with increased risk. Balancing size exposure could improve diversification and capture a broader range of market opportunities.

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 be optimized using the Efficient Frontier to achieve a better risk-return ratio. Currently, the expected return of 14.32% could be improved to 17.99% with a similar risk level. This optimization involves reallocating existing assets to achieve the best possible risk-adjusted returns. Investors should consider this approach to maximize portfolio efficiency, understanding that this does not necessarily mean increasing diversification or altering investment objectives. Regular review and adjustment can ensure continued alignment with personal risk tolerance and financial goals.

Ongoing product costs Info

  • iShares MSCI EM Asia UCITS ETF 0.20%
  • Invesco EQQQ NASDAQ-100 UCITS ETF Acc 0.35%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio's total expense ratio (TER) of 0.22% is relatively low, which is advantageous for long-term returns. Lower costs mean more of the portfolio's returns are retained by the investor, enhancing compounding effects over time. Maintaining a focus on cost-efficient investments is crucial, as high fees can erode returns. Investors should continue to monitor and compare the costs of their investments, ensuring they remain competitive and aligned with their financial goals.

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