A conservative portfolio with global stocks and bonds plus a hedge in gold

Report created on May 28, 2025

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is structured with a 50% allocation in global stocks through the iShares Core MSCI World UCITS ETF, 40% in U.S. Treasury bonds split between 7-10 years and 1-3 years maturities, and a 10% allocation in physical gold. This composition reflects a conservative approach, balancing equity exposure with the stability of bonds and the diversification benefits of gold. The moderate diversification score indicates a balanced but not overly complex asset mix, suitable for investors seeking steady growth with controlled risk.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 5.90%, with a maximum drawdown of -12.41%. This performance suggests resilience during market downturns and a decent return for a conservative risk profile. The days contributing most to returns highlight the portfolio's vulnerability to short-term market movements, underlining the importance of long-term holding to mitigate volatility.

Projection Info

Monte Carlo simulations suggest a wide range of potential outcomes, with a median projected annualized return of 6.31%. The simulations, which run 1,000 different scenarios to forecast future performance, indicate a strong likelihood of positive returns, with 977 simulations ending up in the green. However, it's crucial to remember that these projections are based on historical data, which is not a guaranteed predictor of future performance.

Asset classes Info

  • Stocks
    50%
  • Bonds
    40%
  • Other
    10%

The asset class distribution is well-aligned with the portfolio's conservative profile, with a 50% allocation to stocks for growth potential, 40% in bonds for income and stability, and 10% in gold as a hedge against inflation and currency devaluation. This mix supports a balanced approach to risk and return, though it leans slightly towards safety and preservation of capital.

Sectors Info

  • Technology
    13%
  • Financials
    8%
  • Health Care
    5%
  • Industrials
    5%
  • Consumer Discretionary
    5%
  • Telecommunications
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation shows a technology-heavy tilt within the stock component, which could introduce volatility. However, the presence of financial services, healthcare, and industrials provides some counterbalance. The limited exposure to more volatile sectors like energy and real estate further aligns with the portfolio's conservative stance.

Regions Info

  • North America
    37%
  • Europe Developed
    8%
  • Japan
    3%
  • Australasia
    1%

Geographic distribution is heavily weighted towards North America (37%), with minimal exposure to emerging markets. This focus enhances stability but may limit growth potential from faster-growing economies. Diversifying more into developed European or Asian markets could offer a broader exposure to global economic growth.

Market capitalization Info

  • Mega-cap
    24%
  • Large-cap
    17%
  • Mid-cap
    9%

The market capitalization breakdown, favoring mega and big-cap stocks (41% combined), supports the portfolio's conservative approach by focusing on established, less volatile companies. However, the absence of small-cap exposure means missing out on potential high-growth opportunities, albeit with higher risk.

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 current portfolio's expected return is below the optimal portfolio's projected 14.98% return at a similar risk level. This suggests room for improvement in asset allocation to potentially increase returns without significantly altering the risk profile. Adjusting the mix towards assets or sectors with higher expected returns could achieve a more efficient risk-return balance.

Ongoing product costs Info

  • iShares $ Treasury Bond 1-3yr UCITS ETF EUR Hedged (Acc) 0.10%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares VII PLC - iShares $ Treasury Bd 7-10y ETF USD Acc 0.07%
  • Weighted costs total (per year) 0.13%

With a total expense ratio (TER) of 0.13%, the portfolio is cost-efficient, minimizing the drag on returns from management fees. This is particularly beneficial in a low-return environment, ensuring more of the portfolio's gains are retained by the investor.

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