Balanced Risk Broadly Diversified Portfolio with Strong Technology Focus and Low Costs Suitable for Moderate Investors

Report created on Dec 4, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is entirely invested in the Vanguard FTSE All-World UCITS ETF, providing broad diversification across global markets. This ETF covers a wide range of sectors and geographies, ensuring a well-rounded exposure. The allocation is heavily weighted towards equities, with minimal cash and other asset classes. This composition aligns with a balanced risk profile, offering potential for growth while maintaining some level of stability. The broad diversification helps mitigate risks associated with individual markets or sectors, making it a solid choice for investors seeking a global exposure.

Growth Info

Historically, the portfolio has delivered a commendable CAGR of 13.16%, indicating strong growth over time. Despite a significant maximum drawdown of -33.45%, the portfolio has shown resilience, recovering well and providing substantial returns. The concentration of returns in just 21 days highlights the importance of staying invested to capture these gains. This performance suggests that the portfolio is capable of weathering market volatility while delivering impressive long-term growth, making it appealing for investors with a moderate risk tolerance.

Projection Info

A Monte Carlo simulation, using a hypothetical initial investment, projects a wide range of potential outcomes for the portfolio. With 1,000 simulations, the results show a 5th percentile outcome of a 105.05% return and a median (50th percentile) return of 442.01%. The annualized return across all simulations is 14.04%, with 997 simulations yielding positive returns. This suggests a high likelihood of achieving substantial growth, though the variability in outcomes underscores the inherent risks. The simulation reinforces the portfolio's potential for significant long-term gains, supporting its suitability for balanced investors.

Asset classes Info

  • Stocks
    100%

The portfolio's asset class allocation is predominantly in stocks, comprising over 99% of the total. This high equity exposure aligns with the balanced risk classification, offering growth potential while accepting market volatility. The minimal allocation to other asset classes and cash suggests a focus on maximizing returns through equity investments. This concentration in stocks is suitable for investors comfortable with market fluctuations, seeking capital appreciation over time. Diversification within the equity allocation helps mitigate risks associated with individual stocks or sectors.

Sectors Info

  • Technology
    25%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation in the portfolio is diverse, with a strong emphasis on technology, comprising over 25% of the total. Financial services and healthcare also hold significant weights, contributing to a well-rounded sector exposure. This diversified sector allocation helps reduce the impact of sector-specific downturns, providing a balanced approach to capturing growth opportunities. The technology focus reflects current market trends, offering potential for high returns. Investors should be aware of the sector concentrations and consider their comfort with the associated risks.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, comprising over 64% of the allocation. Europe Developed and Asia Emerging also hold notable positions. This geographic diversification provides exposure to various economic environments, helping to balance risks across regions. The strong North American focus reflects the dominance of US markets, while the inclusion of emerging markets offers growth potential. Investors should consider the implications of geographic concentrations and their comfort with potential regional risks, ensuring alignment with their investment goals.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio benefits from low costs, with a total expense ratio of just 0.22%. This is a significant advantage, as lower costs can enhance net returns over time. The Vanguard FTSE All-World UCITS ETF is known for its cost efficiency, making it an attractive option for investors seeking to minimize expenses. Keeping costs low is a fundamental principle of successful investing, allowing more of the portfolio's returns to compound over time. This cost structure is suitable for investors who prioritize maximizing their net returns.

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