A balanced portfolio with a strong focus on Malaysian equities and sustainable global investments
Report created on Dec 8, 2024Risk profile
4/7
Diversification profile
4/5
Positions
-
XC Xtrackers MSCI Malaysia UCITS ETF 1C
XCS3 - LU0514694370 50.13% -
IU iShares Dow Jones Global Sustainability Screened UCITS ETF USD (Acc)
IUSL - IE00B57X3V84 40.86% -
G2 VanEck Gold Miners UCITS ETF
G2X - IE00BQQP9F84 9.01%
This portfolio is predominantly composed of three ETFs: Xtrackers MSCI Malaysia UCITS ETF at 50.13%, iShares Dow Jones Global Sustainability Screened UCITS ETF at 40.86%, and VanEck Gold Miners UCITS ETF at 9.01%. The heavy leaning towards Malaysian equities and sustainability-focused global stocks indicates a strategy that balances regional exposure with ethical investment principles. The inclusion of gold miners adds a layer of diversification with exposure to commodities. This composition suggests a focus on growth within specific themes and regions, which may appeal to investors with a particular interest in these areas. It is important to regularly review the asset mix to ensure alignment with broader financial goals.
Growth
Historically, the portfolio has demonstrated a compound annual growth rate (CAGR) of 9.56%, with a maximum drawdown of -28.83%. This performance reflects a strong upward trend, although the significant drawdown underscores potential volatility. The fact that 90% of returns were achieved in just 19 days highlights the importance of staying invested for the long term to capture these gains. Historical performance can provide insights, but it is crucial to remember that past results do not guarantee future returns. Maintaining a diversified approach can help mitigate the impact of potential downturns.
Projection
A Monte Carlo simulation, which uses historical data to project future performance, was conducted with 1,000 simulations. The results showed an optimistic outlook, with a median projected return of 301.96% and a 67th percentile return of 504.25%. However, there is still a 5th percentile projection of -3.75%, indicating potential downside risk. The annualized return across all simulations was 13.61%, suggesting the potential for substantial growth. It is important to note that simulations are based on historical data and assumptions, which may not fully capture future market conditions.
Asset classes
- Stocks 100%
The portfolio is heavily weighted towards stocks at 99.72%, with minimal allocations to cash, other assets, and bonds. This strong focus on equities suggests an aggressive growth strategy, which can offer higher returns but also comes with increased risk. The limited exposure to other asset classes could mean less protection during market downturns. Diversifying across different asset classes, such as adding more bonds or cash, can help balance the risk and provide a more stable return profile over time. Investors should assess whether this allocation aligns with their risk tolerance and financial objectives.
Sectors
- Financials 29%
- Basic Materials 15%
- Technology 12%
- Industrials 9%
- Health Care 8%
- Utilities 8%
- Telecommunications 7%
- Consumer Staples 5%
- Consumer Discretionary 4%
- Energy 2%
- Real Estate 1%
The portfolio spans a wide range of sectors, with a notable concentration in Financial Services at 28.79%, followed by Basic Materials and Technology. This sectoral allocation suggests a strategic focus on industries with potential for growth and resilience. However, the high concentration in financial services could expose the portfolio to sector-specific risks. Balancing exposure across more sectors can enhance diversification and reduce the impact of adverse events in any single industry. Regularly reviewing sector allocations can help maintain a balanced risk profile and capture emerging opportunities.
Regions
- Asia Emerging 52%
- North America 30%
- Europe Developed 8%
- Asia Developed 3%
- Japan 3%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio is predominantly invested in Asia Emerging markets, particularly Malaysia, at 52.38%, followed by North America and Europe Developed. This suggests a strategic focus on emerging markets, which can offer higher growth potential but also come with increased volatility. The geographic concentration in Asia could expose the portfolio to regional risks, such as political instability or economic downturns. Diversifying across more regions can help mitigate these risks and enhance the portfolio's resilience to global market fluctuations.
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.
Optimization using the Efficient Frontier can enhance the portfolio's risk-return ratio by adjusting current allocations among the existing assets. This approach seeks to achieve the maximum possible return for a given level of risk. While diversification is a key component of an efficient portfolio, the focus here is on optimizing the current asset mix to improve the risk-return balance. Regularly revisiting the portfolio's allocations and making necessary adjustments can help maintain efficiency as market conditions and personal goals evolve.
Ongoing product costs
- VanEck Gold Miners UCITS ETF 0.53%
- iShares Dow Jones Global Sustainability Screened UCITS ETF USD (Acc) 0.60%
- Xtrackers MSCI Malaysia UCITS ETF 1C 0.50%
- Weighted costs total (per year) 0.54%
The total expense ratio (TER) for this portfolio is relatively low at 0.54%, with individual costs ranging from 0.50% to 0.60% across the ETFs. Keeping costs low is crucial for maximizing net returns over the long term, as high fees can erode gains. While the current cost structure is reasonable, investors should remain vigilant about any changes in fees. Periodically reviewing and comparing costs with similar investment options can ensure you are not overpaying. Reducing expenses through lower-cost alternatives can improve overall portfolio performance.
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