A tech-focused balanced portfolio with strong global exposure and moderate risk level

Report created on Jan 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards ETFs, with a significant focus on technology and global equities. The Vanguard FTSE All-World UCITS ETF comprises 50% of the portfolio, providing broad market exposure. The remaining 50% is concentrated in thematic ETFs focused on artificial intelligence, semiconductors, and technology. Compared to typical balanced portfolios, this portfolio leans towards growth-oriented sectors, which can lead to higher returns but also increased volatility. Consider diversifying further by including non-tech sectors to balance growth potential with stability.

Growth Info

Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 17.35%. This impressive growth is partly due to the strong performance of technology sectors over recent years. The maximum drawdown of -23.81% indicates the portfolio's vulnerability during market downturns. While past performance is not indicative of future results, this history suggests a robust growth potential. However, investors should be prepared for potential volatility and consider strategies to mitigate risks during market corrections.

Projection Info

Using Monte Carlo simulations, future projections show a wide range of possible outcomes for this portfolio. The median outcome suggests a 50th percentile return of 899.59%, with the 5th percentile at 153.29% and the 67th at 1,296.69%. These simulations, based on historical data, provide an estimate of future performance but do not guarantee results. The high number of simulations with positive returns (997 out of 1,000) indicates a strong likelihood of continued growth, though investors should remain cautious about the inherent uncertainties in financial markets.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly composed of equities, with 99.96% in stocks. This high concentration in a single asset class suggests a lack of diversification, which could expose the portfolio to significant risk during equity market downturns. Compared to typical balanced portfolios, which often include bonds or other fixed-income assets, this allocation is more aggressive. Consider incorporating other asset classes, such as bonds or real estate, to enhance diversification and potentially reduce overall portfolio volatility.

Sectors Info

  • Technology
    53%
  • Financials
    9%
  • Consumer Discretionary
    8%
  • Telecommunications
    7%
  • Industrials
    6%
  • Health Care
    5%
  • Consumer Staples
    3%
  • Basic Materials
    3%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%

With over 53% in technology, the portfolio is heavily skewed towards this sector. While this focus has driven strong past performance, it also increases vulnerability to sector-specific risks, such as regulatory changes or technological disruptions. Other sectors, like financial services and consumer cyclicals, are represented but to a much lesser extent. Balancing sector allocation by increasing exposure to underrepresented areas could help mitigate risk and stabilize returns, especially during periods of tech sector volatility.

Regions Info

  • North America
    73%
  • Europe Developed
    12%
  • Asia Developed
    5%
  • Japan
    5%
  • Asia Emerging
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly exposed to North America, accounting for 72.86% of its allocation. This concentration provides strong exposure to the U.S. market but limits diversification benefits from other regions. While developed Europe and Asia are included, their allocations are relatively small. To enhance geographic diversification, consider increasing exposure to emerging markets or other underrepresented regions, which could offer growth opportunities and reduce reliance on North American market performance.

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 could benefit from optimization using the Efficient Frontier, focusing on achieving the best possible risk-return ratio with current assets. This involves adjusting the weights of existing holdings to improve efficiency. Such optimization doesn't necessarily mean adding new assets but rather reallocating within the portfolio to balance risk and return better. By doing so, investors can potentially enhance returns without significantly increasing risk, aligning closely with their investment objectives.

Ongoing product costs Info

  • L&G Battery Value-Chain UCITS ETF 0.49%
  • VanEck Semiconductor UCITS ETF 0.35%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Xtrackers Artificial Intelligence &Big Data UCITS ETF 1C 0.35%
  • Xtrackers MSCI World Information Technology UCITS ETF 1C 0.25%
  • Weighted costs total (per year) 0.28%

The portfolio's total expense ratio (TER) is relatively low at 0.28%, which supports better long-term performance by minimizing costs. The Vanguard FTSE All-World UCITS ETF, with a TER of 0.22%, contributes significantly to this efficiency. Keeping costs low is crucial for maximizing returns over time. Investors should continue to monitor TERs and consider replacing high-fee assets with lower-cost alternatives, such as ETFs or index funds, to further improve cost efficiency.

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