Globally diversified portfolio with strong historical performance and a balanced risk profile

Report created on Mar 9, 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 consists entirely of the Vanguard FTSE All-World UCITS ETF, representing a single asset class: stocks. While it offers broad diversification across regions and sectors, it lacks exposure to other asset classes such as bonds or real estate. This composition aligns with a balanced profile, focusing on equity growth. However, the absence of other asset classes may expose the portfolio to higher volatility. To enhance diversification and potentially reduce risk, consider incorporating other asset types, such as fixed income or alternative investments, depending on your risk tolerance and investment goals.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 11.44%, reflecting robust growth over time. However, it has also experienced a significant maximum drawdown of -33.60%, indicating potential vulnerability during market downturns. Comparing this performance to benchmarks, it aligns well with global equity indices, suggesting effective diversification. While past performance is not a guarantee of future results, the consistent growth indicates a well-structured equity-focused strategy. To better manage drawdowns, consider strategies like diversification into less volatile assets or setting aside cash reserves for market corrections.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential outcomes, suggests a median future growth of 324.1% with a robust annualized return of 12.22%. This indicates a strong likelihood of continued growth, though it's important to remember projections are not certainties. The wide range of outcomes highlights the inherent uncertainty in investing. With 992 out of 1,000 simulations showing positive returns, the portfolio appears resilient. However, it's wise to regularly review and adjust your strategy to adapt to changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is concentrated entirely in stocks, which can drive significant growth but also introduce volatility. While this allocation aligns with a growth-oriented strategy, it may not suit those seeking income stability or risk mitigation through asset class diversification. Compared to a balanced benchmark, typically including bonds, this portfolio is more aggressive. To enhance stability and reduce potential volatility, consider incorporating fixed income or alternative investments. This could provide a buffer against market fluctuations and offer more consistent returns over time.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Industrials
    10%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio's sector allocation is tech-heavy, with 26% in Technology, followed by Financial Services at 17%. While this concentration can drive growth, especially during tech booms, it may also lead to increased volatility, particularly in times of tech sector downturns or interest rate hikes. Compared to common benchmarks, this allocation is somewhat concentrated. Diversifying into underrepresented sectors like Utilities or Real Estate could mitigate sector-specific risks and stabilize returns. Regularly reviewing sector exposure ensures alignment with market trends and personal risk preferences.

Regions Info

  • North America
    67%
  • Europe Developed
    14%
  • Japan
    6%
  • Asia Emerging
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, accounting for 67% of assets, with lesser exposure to Europe and Asia. This concentration can benefit from the strong performance of North American markets but may increase vulnerability to regional downturns. Compared to global benchmarks, this allocation is slightly overweight in North America. To enhance geographic diversification, consider increasing exposure to emerging markets or underrepresented regions. This could reduce regional risk and capture growth opportunities in diverse economic environments.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    35%
  • Mid-cap
    17%

The portfolio is predominantly composed of mega-cap stocks at 47%, followed by large-cap at 35% and medium-cap at 17%. This distribution aligns with a focus on established, stable companies, offering potential for steady growth. However, the lack of exposure to small and micro-cap stocks might limit opportunities for higher risk-adjusted returns. Compared to benchmarks, this allocation is conservative. To potentially enhance returns, consider incorporating smaller-cap stocks, which can offer higher growth prospects, albeit with increased volatility.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio's cost structure, with a Total Expense Ratio (TER) of 0.22%, is impressively low, supporting better long-term performance by minimizing fee drag. This aligns with best practices in cost efficiency, enhancing net returns. Compared to industry averages, the low TER is a significant advantage. To maintain cost efficiency, regularly review and compare fees across potential investments. Consider the impact of fees on overall returns and prioritize low-cost options to maximize growth potential over time.

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