A conservative portfolio with diverse asset classes and moderate geographic exposure

Report created on Dec 26, 2024

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of a balanced mix of bonds, equities, and cash, with bonds making up roughly 50% and equities about 45%. This allocation is typical for a conservative investor, aiming to preserve capital while achieving modest growth. Bonds often provide stability and income, while equities offer growth potential. To enhance returns, consider slightly increasing equity exposure if comfortable with higher volatility. However, the current mix aligns well with a low-risk profile, offering a stable foundation for conservative investment goals.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 4.55%, indicating steady growth over time. This performance is decent for a conservative portfolio, which prioritizes capital preservation over high returns. The maximum drawdown of -9.24% suggests the portfolio has experienced some volatility, but this is relatively controlled compared to more aggressive investments. To maintain this performance, continue monitoring market conditions and adjust allocations as needed to mitigate risk while capitalizing on growth opportunities.

Projection Info

Using Monte Carlo simulations, the portfolio's potential future outcomes were projected, with an annualized return of 5.74%. This method uses historical data to simulate a range of possible future returns, providing insight into potential risks and rewards. While 946 out of 1,000 simulations resulted in positive returns, it's important to note that past performance doesn't guarantee future results. Regularly reviewing and adjusting your portfolio can help align it with changing market conditions and personal financial goals.

Asset classes Info

  • Bonds
    50%
  • Stocks
    45%
  • Cash
    5%

The portfolio's asset class distribution includes nearly 50% in bonds, around 45% in stocks, and a small portion in cash. This mix is typical for conservative investors, offering stability through bonds while maintaining growth potential via equities. Compared to common benchmarks, the bond-heavy allocation reduces volatility, which is ideal for risk-averse investors. To enhance diversification, consider incorporating alternative assets or increasing equity exposure if your risk tolerance allows. This could offer additional growth opportunities without significantly increasing risk.

Sectors Info

  • Financials
    7%
  • Industrials
    6%
  • Technology
    5%
  • Real Estate
    5%
  • Consumer Discretionary
    5%
  • Health Care
    4%
  • Consumer Staples
    3%
  • Basic Materials
    3%
  • Telecommunications
    3%
  • Utilities
    2%
  • Energy
    2%

The sector allocation is relatively balanced, with the largest weight in financial services and industrials. This diversification across sectors helps mitigate sector-specific risks. However, a notable concentration in financials could increase vulnerability to economic downturns or interest rate changes. To further diversify, consider adjusting sector weights to include more defensive sectors like consumer staples or healthcare, which can provide stability during volatile market conditions. This balanced approach aligns well with a conservative investment strategy.

Regions Info

  • North America
    18%
  • Europe Developed
    14%
  • Asia Emerging
    5%
  • Asia Developed
    3%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Australasia
    1%

Geographically, the portfolio is primarily focused on North America and developed Europe, with limited exposure to emerging markets. This allocation aligns with a conservative strategy, as developed markets generally offer more stability. However, the limited exposure to emerging markets may restrict potential growth opportunities. To enhance diversification, consider increasing exposure to regions like Asia or Latin America, which can offer higher growth potential albeit with increased risk. This adjustment could help balance stability with growth.

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 potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves reallocating existing assets to maximize returns for a given level of risk or minimize risk for a desired return. While the current allocation is conservative, exploring optimization could reveal opportunities to enhance performance without significantly altering the risk profile. Regularly reassessing asset allocations and adjusting them as needed can help maintain an efficient and effective investment strategy.

Dividends Info

  • VanEck Vectors ETFs N.V. - VanEck Vectors Global Real Estate UCITS ETF 3.40%
  • Weighted yield (per year) 0.08%

The portfolio's dividend yield is relatively low at 0.08%, with the VanEck Vectors Global Real Estate ETF contributing a notable 3.4%. Dividends can provide a steady income stream, which is beneficial for conservative investors seeking regular cash flow. To increase dividend income, consider adding more high-yielding assets or funds. However, ensure that these additions align with your risk tolerance and overall investment strategy, as higher yields often come with increased risk.

Ongoing product costs Info

  • iShares $ Treasury Bond 1-3yr UCITS ETF EUR Hedged (Acc) 0.10%
  • iShares Edge MSCIope Quality Factor UCITS 0.25%
  • iShares Edge MSCI Europe Momentum Factor UCITS ETF EUR (Acc) 0.25%
  • iShares Euro Ultrashort Bond UCITS 0.09%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • JPM Global Equity Multi-Factor UCITS ETF USD Acc 0.19%
  • Lyxor UCITS EuroMTS Highest Rated Macro-Weighted Govt Bond 1-3Y DR 0.16%
  • VanEck Vectors ETFs N.V. - VanEck Vectors Global Real Estate UCITS ETF 0.25%
  • SPDR® MSCI Europe Small Cap Value Weighted UCITS ETF EUR Acc 0.30%
  • Weighted costs total (per year) 0.16%

The portfolio's Total Expense Ratio (TER) is 0.16%, which is quite low and beneficial for long-term performance. Low costs mean more of your returns are retained, which can significantly impact compounding over time. Ensure that each ETF's cost aligns with its performance and role in the portfolio. Regularly review and compare costs with similar funds to ensure you're getting value for money. Maintaining a low-cost structure is a key component of an effective investment strategy.

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