A balanced portfolio with significant North American exposure and focus on sustainable investments

Report created on Dec 7, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, comprising 99.76% of the total investments. The largest holdings include the iShares Core S&P 500 and MSCI World ETFs, making up nearly half of the portfolio. This suggests a strong emphasis on established markets, particularly in North America. Such a composition typically offers potential for growth but comes with market volatility. To balance this, consider integrating a small percentage of bonds or alternative assets to mitigate risk. A diversified mix can help cushion against market downturns while maintaining growth potential.

Growth Info

Historically, the portfolio has shown robust growth with a compound annual growth rate (CAGR) of 15.33%. However, it also experienced a significant maximum drawdown of -35.02%, indicating vulnerability during market downturns. This performance highlights the potential for high returns but also underscores the associated risks. Investors should be prepared for periods of volatility and consider strategies to protect against large losses, such as setting stop-loss orders or reallocating to more stable assets during uncertain market conditions.

Projection Info

Monte Carlo simulations project future portfolio outcomes by analyzing historical data. With 1,000 simulations, the portfolio shows an annualized return of 14.69%. This indicates a strong potential for future growth, with 97.5% of simulations resulting in positive returns. However, projections rely on past data, which may not account for future market changes. Investors should regularly review and adjust their portfolios to align with evolving market conditions and personal goals, ensuring a balance between risk and reward.

Asset classes Info

  • Stocks
    100%

The portfolio is almost entirely composed of stocks, with a negligible allocation to other asset classes like cash or bonds. This concentration in equities suggests a focus on capital appreciation. While stocks offer higher growth potential, they also come with increased risk. Diversifying into bonds or other asset classes could provide stability and reduce volatility. This balance between asset classes can help manage risk and provide a more consistent return over time, especially during periods of market turbulence.

Sectors Info

  • Technology
    24%
  • Financials
    16%
  • Health Care
    11%
  • Industrials
    10%
  • Consumer Discretionary
    9%
  • Telecommunications
    7%
  • Basic Materials
    7%
  • Consumer Staples
    5%
  • Utilities
    4%
  • Energy
    4%
  • Real Estate
    3%

Sector allocation shows a significant focus on technology, financial services, and healthcare. These sectors together account for over half of the portfolio, indicating a growth-oriented strategy. While these sectors have historically performed well, overconcentration can pose risks if any sector underperforms. To reduce sector-specific risk, consider rebalancing towards underrepresented sectors like consumer defensives or utilities, which can provide stability during economic downturns. A balanced sector allocation can enhance diversification and improve risk-adjusted returns.

Regions Info

  • North America
    76%
  • Europe Developed
    7%
  • Asia Emerging
    5%
  • Japan
    2%
  • Australasia
    1%
  • Asia Developed
    1%
  • Latin America
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily skewed towards North America, which constitutes over 76% of the total allocation. This concentration in a single region can expose the portfolio to geopolitical and economic risks specific to that area. To mitigate these risks, consider increasing exposure to other regions such as Europe or Asia. Diversifying geographically can enhance the portfolio's resilience to regional downturns and capitalize on growth opportunities in emerging markets, thereby improving overall risk management.

Redundant positions Info

  • iShares Dow Jones Global Sustainability Screened UCITS ETF USD (Acc)
    iShares Core S&P 500 UCITS ETF USD (Acc)
    Vanguard FTSE All-World UCITS ETF USD Accumulation
    iShares MSCI USA ESG Screened UCITS ETF
    iShares Core MSCI World UCITS ETF USD (Acc)
    High correlation

The portfolio contains highly correlated assets, particularly among the large-cap and global equity ETFs. High correlation means these assets tend to move in the same direction, reducing diversification benefits. To improve risk management, consider replacing some of these correlated ETFs with assets that have lower correlation. This could involve incorporating different asset classes or sectors that do not move in tandem, thereby enhancing the portfolio's ability to withstand market fluctuations and achieve a more balanced risk-return 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.

The portfolio could benefit from optimization using the Efficient Frontier, which aims to achieve the best possible risk-return ratio. Currently, the portfolio includes overlapping, highly correlated assets that offer limited diversification benefits. By reallocating investments among existing assets to reduce correlation, the portfolio can achieve a more efficient balance between risk and return. This process involves finding the optimal asset mix that maximizes returns for a given level of risk, helping to enhance overall performance without adding new assets.

Dividends Info

  • iShares Global Clean Energy UCITS 1.30%
  • Weighted yield (per year) 0.03%

The portfolio's dividend yield is notably low at 0.03%, suggesting a focus on capital gains rather than income generation. While growth-focused portfolios can result in substantial appreciation, dividends can provide a steady income stream and help cushion against market volatility. Consider incorporating higher-yielding assets to enhance income potential. This approach can offer a more balanced total return, combining both capital appreciation and income, which can be particularly beneficial during periods of market uncertainty.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • VanEck Gold Miners UCITS ETF 0.53%
  • iShares Global Clean Energy UCITS 0.65%
  • iShares Dow Jones Global Sustainability Screened UCITS ETF USD (Acc) 0.60%
  • iShares MSCI India UCITS ETF USD Acc 0.65%
  • iShares MSCI USA ESG Screened UCITS ETF 0.07%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Xtrackers MSCI Malaysia UCITS ETF 1C 0.50%
  • SPDR® Russell 2000 US Small Cap UCITS ETF 0.30%
  • Weighted costs total (per year) 0.28%

The total expense ratio (TER) of the portfolio stands at 0.28%, which is relatively low, indicating cost efficiency. However, some holdings, like the iShares Global Clean Energy and VanEck Gold Miners ETFs, have higher expense ratios. Reducing costs can enhance long-term returns, as fees can significantly erode gains over time. Consider reviewing the cost structure and potentially replacing high-cost ETFs with more cost-effective alternatives without compromising on diversification or performance, thus optimizing the portfolio's cost efficiency.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey