A growth-focused portfolio split between a global quality ETF and Nike stock
Report created on May 9, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
IS iShares MSCI World Quality Factor UCITS
IS3Q - IE00BP3QZ601 50.00% -
NK Nike Inc
NKE - US6541061031 50.00%
This portfolio, equally divided between the iShares MSCI World Quality Factor UCITS ETF and Nike Inc. common stock, presents a unique blend of global diversification and single-stock concentration. With 50% of the portfolio in a quality factor ETF, it leverages a strategy focusing on companies with strong fundamentals across the globe. The other half in Nike introduces a significant tilt towards consumer cyclicals and a high concentration risk.
Growth
The portfolio's historical performance, with a Compound Annual Growth Rate (CAGR) of 4.91% and a maximum drawdown of -36.40%, indicates moderate growth with periods of significant volatility. The days contributing to 90% of returns being notably few suggest that performance heavily relies on specific market conditions or events. This volatility is a critical consideration for growth-oriented investors, highlighting the importance of understanding market cycles and the impact of concentration on risk.
Projection
Monte Carlo simulations, projecting a wide range of potential outcomes, suggest a median annualized return of 4.94%. However, the significant spread between the 5th and 67th percentiles (-75.1% to 86.4%) underscores the portfolio's risk. These projections, while useful for understanding possible future scenarios, are inherently limited by historical data and cannot guarantee future performance.
Asset classes
- Stocks 100%
The portfolio's allocation is entirely in stocks, with no exposure to other asset classes such as bonds or real estate. This singular focus on equities enhances growth potential but also increases volatility and risk, especially without the buffer of more stable asset classes.
Sectors
- Consumer Discretionary 55%
- Technology 13%
- Financials 9%
- Health Care 5%
- Industrials 5%
- Telecommunications 4%
- Consumer Staples 3%
- Energy 2%
- Basic Materials 2%
- Utilities 1%
- Real Estate 1%
Sectoral allocation is heavily weighted towards consumer cyclicals, primarily due to the large stake in Nike. This concentration may offer high growth potential but also increases sensitivity to economic cycles. The remaining sectors, including technology and financial services, suggest some level of diversification, but the overall balance is skewed.
Regions
- North America 88%
- Europe Developed 10%
- Japan 1%
- Australasia 1%
Geographic allocation is heavily North American-centric, with 88% exposure, primarily reflecting the portfolio's substantial investment in Nike. The ETF provides some international diversification, but the overall geographic spread is limited, potentially missing out on growth opportunities in emerging markets and other developed regions.
Market capitalization
- Large-cap 66%
- Mega-cap 26%
- Mid-cap 8%
The focus on big and mega-cap companies (92% combined) aligns with the portfolio's growth and quality focus but may limit exposure to the higher growth potential of smaller companies. This allocation strategy tends to favor stability over the higher volatility but potentially higher returns of small and mid-cap stocks.
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's current expected return is below the optimal portfolio's expected return of 11.16% at the same risk level, suggesting room for improvement. Adjusting the asset allocation could potentially increase returns without proportionately increasing risk, aligning more closely with the Efficient Frontier.
Ongoing product costs
- iShares MSCI World Quality Factor UCITS 0.30%
- Weighted costs total (per year) 0.15%
With a total expense ratio (TER) of 0.15% for the portfolio, costs are relatively low, enhancing net returns over the long term. Keeping costs minimized is crucial for maximizing investment growth, especially in a portfolio where one half is invested in a single stock.
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