Globally diversified two fund portfolio with strong low volatility tilt and efficient risk balance
Report created on Apr 26, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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VG Vanguard FTSE All-World UCITS ETF
VGWL - IE00B3RBWM25 80.00% -
VA Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Income
VAGE - IE00BG47KB92 20.00%
The structure is refreshingly simple: about 80% in a global stock ETF and 20% in a global bond ETF. That creates a classic “balanced but growth‑oriented” mix, with stocks doing most of the heavy lifting and bonds acting as a stabilizer. Simple line‑ups like this are powerful because there’s less to monitor and fewer chances to drift into accidental bets. The main takeaway is that this setup leans clearly toward long‑term growth while still acknowledging the need for some cushion. Anyone using a structure like this is basically choosing to ride global markets rather than trying to outguess them with lots of moving parts.
Growth
From mid‑2019 to early 2026, $1,000 grew to about $1,796, a compound annual growth rate (CAGR) of 8.94%. CAGR is like your average speed on a long trip, smoothing out bumps along the way. This lagged both the U.S. market (13.52%) and the broad global market (11.02%), mainly because those references hold more equities and less ballast. Max drawdown, the worst peak‑to‑trough loss, was about -27.8%, gentler than the roughly -33% seen in the benchmarks. The story here: returns have been lower, but downside has been somewhat softer, which is exactly what a stock‑bond mix is usually trying to achieve over time.
Asset classes
- Stocks 80%
- Bonds 20%
Asset‑class allocation is straightforward: 80% in stocks and 20% in bonds. That’s more growth‑tilted than a 60/40 type mix, yet still meaningfully cushioned compared with an all‑equity portfolio. Stocks drive long‑term returns but also create big swings; bonds usually dampen those swings and can provide income. Relative to broad global standards, 80/20 is a moderately assertive choice for someone who can handle ups and downs but wants some protection. This balance is well‑aligned with a “balanced investor” risk profile and offers a clear framework: if future volatility ever feels too high, adjusting this stock/bond split is the main risk dial to turn.
Sectors
- Technology 21%
- Financials 13%
- Industrials 9%
- Consumer Discretionary 8%
- Health Care 7%
- Telecommunications 7%
- Consumer Staples 4%
- Basic Materials 3%
- Energy 3%
- Utilities 2%
- Real Estate 2%
This breakdown covers the equity portion of your portfolio only.
Sector exposure is reasonably broad, with technology leading at about 21%, followed by financials, industrials, and consumer‑related areas. This pattern broadly mirrors global equity benchmarks, which is a strong indicator of diversification. Tech is the biggest slice, which is common today since many of the world’s largest firms are in that space; this can mean higher sensitivity to innovation cycles and interest‑rate moves. However, meaningful allocations to financials, health care, industrials, and other sectors help spread risk across different parts of the economy. Overall, the sector mix looks balanced and appropriate for someone aiming to capture the global market’s growth rather than make big sector bets.
Regions
- North America 50%
- Europe Developed 12%
- Japan 5%
- Asia Developed 5%
- Asia Emerging 4%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
This breakdown covers the equity portion of your portfolio only.
Geographically, roughly half of the equity exposure sits in North America, with the rest spread across Europe, Japan, other developed Asia, and emerging regions. That 50% North America share is a bit lower than many global indices that often sit closer to 60%, which slightly boosts non‑U.S. diversification. Exposure to Europe and Japan adds developed‑market balance, while smaller slices in Asia emerging, Latin America, and Africa/Middle East bring in faster‑growing but more volatile economies. This allocation is well‑balanced and aligns closely with global standards, helping reduce the risk that any one country or region’s slump completely dominates long‑term results.
Market capitalization
- Mega-cap 39%
- Large-cap 27%
- Mid-cap 13%
This breakdown covers the equity portion of your portfolio only.
Market‑cap exposure is dominated by mega‑cap and large‑cap companies, with smaller but meaningful exposure to mid‑caps. Mega‑caps alone account for about 39%, which matches the reality that global indexes are top‑heavy. Large, established firms tend to be more stable and liquid, which often lowers volatility compared to small‑cap‑heavy portfolios. On the flip side, it means less direct participation in the very smallest companies, which sometimes deliver higher long‑term growth but with bigger swings. For many investors, this large/mega focus is a feature, not a bug, since it keeps the ride smoother while still sharing in global economic expansion through the world’s most significant businesses.
True holdings
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NV NVIDIA Corporation 3.37%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
AA Apple Inc 3.13%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
MS Microsoft Corporation 2.37%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
AM Amazon.com Inc 1.64%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
GO Alphabet Inc Class A 1.48%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 1.26%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
AV Broadcom Inc 1.20%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
GO Alphabet Inc Class C 1.20%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
ME Meta Platforms Inc. 1.15%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF
-
TS Tesla Inc 0.92%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard FTSE All-World UCITS ETF
- Top 10 total 17.73%
This breakdown covers the equity portion of your portfolio only.
Looking through the equity ETF’s top holdings shows familiar mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, Alphabet, and Meta. Several of these appear more than once via different share classes, which adds a bit of hidden concentration to the very largest global companies. Because this look‑through only covers ETF top‑10 positions, actual overlap is probably larger than reported. This pattern is typical of broad market funds: a lot of index performance is driven by a relatively small group of giants. The practical takeaway is that even a very diversified ETF still has meaningful exposure to the world’s dominant firms, which can boost returns but also ties results to their fortunes.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure stands out most on low volatility and yield. Low volatility shows a very high tilt, meaning the holdings lean toward stocks that historically swing less than the market. That can help cushion downturns but might lag in roaring bull markets when riskier names sprint ahead. Yield exposure is also high, pointing to a bias toward securities paying above‑average income, which can be attractive for cash‑flow needs or dampening drawdowns. Value, size, momentum, and quality hover near neutral, so there’s no big tilt there. Overall, this factor mix supports the idea of a smoother ride with a bit more income, aligning well with balanced‑type objectives.
Risk contribution
-
Vanguard FTSE All-World UCITS ETF
Weight: 80.00% 99.4% -
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Income
Weight: 20.00% 0.6%
Risk contribution shows how much each holding drives the portfolio’s ups and downs, which can differ a lot from simple weights. Here, the global equity ETF is 80% of the capital but contributes an outsized 99.4% of total risk. The bond ETF, even at 20% weight, adds only about 0.6% of risk, reflecting how much calmer high‑quality bonds typically are compared with stocks. This dynamic is normal: most portfolio volatility usually comes from equities. If someone ever wanted to soften the ride further, the main lever is reducing the equity slice, not tinkering with bonds, since that’s what would meaningfully change the risk profile.
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.
On the risk/return chart, the current mix sits right on or very close to the efficient frontier. The efficient frontier represents the best possible return for each risk level using just these two holdings in different weights. With a Sharpe ratio of 0.55, the portfolio’s risk‑adjusted return is solid, though the “optimal” mix on the frontier reaches a higher Sharpe of 0.65 by accepting more risk (higher volatility) and more expected return. The key takeaway: within this simple two‑fund setup, the current allocation is already efficient for its chosen risk level. Any change would be about comfort with risk, not fixing inefficiency.
Dividends
- Vanguard FTSE All-World UCITS ETF 0.60%
- Weighted yield (per year) 0.48%
The overall dividend yield is modest at around 0.48%, with the global equity ETF itself yielding about 0.60%. That’s on the lower side historically, reflecting today’s world where many companies prefer buybacks or growth reinvestment over large cash payouts. Dividends still matter because they contribute a steady component of total return and can provide some psychological comfort during flat or down markets. But this portfolio’s profile is clearly more growth‑driven than income‑driven. Anyone truly relying on cash flow might eventually consider whether this yield level fits their needs, but for long‑term compounding, a lower yield is not necessarily a drawback.
Ongoing product costs
- Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Income 0.10%
- Vanguard FTSE All-World UCITS ETF 0.19%
- Weighted costs total (per year) 0.17%
Total ongoing costs are impressively low, with a blended TER (total expense ratio) around 0.17%. TER is the annual fee charged by the funds, taken out of returns automatically, like a small management toll. Keeping this number low is one of the most reliable ways to improve long‑term outcomes, because fees compound just like returns do, but in the wrong direction. Being down near the 0.10–0.20% range is a major positive compared with many active funds that charge 0.75% or more. These low costs strongly support better net performance over decades and indicate a thoughtful, cost‑conscious approach.
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