A balanced portfolio with a strong focus on technology and global equities

Report created on Dec 29, 2024

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 of four ETFs, with the Vanguard FTSE All-World UCITS ETF USD Accumulation making up 60%. The remaining 40% is divided among L&G Cyber Security, Xtrackers NASDAQ 100, and Xtrackers MSCI World Momentum ETFs. This composition leans heavily towards global equities with a notable emphasis on technology. Compared to typical balanced portfolios, this one shows a higher allocation to equities, which could lead to greater growth potential but also increased volatility. To maintain balance, consider periodically reviewing allocations to ensure they align with your risk tolerance and investment goals.

Growth Info

Historically, this portfolio has shown a CAGR of 13.3%, indicating strong growth potential. However, it also experienced a maximum drawdown of -17.26%, reflecting the risks associated with high equity exposure. Compared to benchmarks, this performance suggests a good risk-return balance, typical for a growth-oriented strategy. While past performance is not a guarantee of future results, it provides a useful reference. Continued monitoring of market conditions and regular performance reviews can help manage risks and maintain alignment with investment objectives.

Projection Info

Using Monte Carlo simulations, this portfolio shows potential future growth, with a median return of 565.49% and a high likelihood of positive outcomes. The Monte Carlo method uses historical data to simulate a range of possible future outcomes, highlighting the portfolio's robustness. However, it's important to note that these projections are not certainties. Regularly reviewing and adjusting your portfolio based on changing market conditions can help optimize performance and manage risks effectively.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.9% in equities. This high allocation to a single asset class can drive growth but also increases exposure to market volatility. Compared to balanced portfolios, which typically include bonds or other fixed-income assets, this portfolio's risk profile is higher. To enhance diversification and mitigate risk, consider adding different asset classes such as bonds or real estate, which can provide stability during market downturns.

Sectors Info

  • Technology
    40%
  • Financials
    12%
  • Consumer Discretionary
    9%
  • Telecommunications
    9%
  • Health Care
    8%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Technology dominates this portfolio, comprising over 40% of the total allocation. Other significant sectors include financial services and consumer cyclicals. This concentration in technology can lead to high growth, especially in bullish markets, but also increases susceptibility to sector-specific risks. Diversifying into underrepresented sectors like utilities or real estate can help balance the portfolio and reduce volatility, particularly during periods of tech sector volatility or regulatory changes.

Regions Info

  • North America
    76%
  • Europe Developed
    10%
  • Japan
    5%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%

With 75.6% of the portfolio allocated to North America, there's a strong geographic concentration. While this can capitalize on the robust U.S. market, it also exposes the portfolio to regional risks. Diversification across regions can help mitigate these risks. Consider increasing exposure to Europe, Asia, and other emerging markets to achieve a more balanced geographic allocation, which can enhance resilience against localized economic downturns.

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 can be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio for a given set of assets. This involves adjusting the allocation among current holdings to maximize returns for a given level of risk. While this does not guarantee diversification, it can enhance performance by efficiently allocating resources. Regularly reassessing your portfolio's position on the Efficient Frontier can help ensure it remains aligned with your risk tolerance and financial goals.

Ongoing product costs Info

  • L&G Cyber Security UCITS ETF 0.69%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Xtrackers MSCI World Momentum UCITS ETF 0.25%
  • Xtrackers NASDAQ 100 UCITS ETF 1C 0.20%
  • Weighted costs total (per year) 0.29%

The overall cost of this portfolio is relatively low, with a Total Expense Ratio (TER) of 0.29%. This is advantageous as lower costs can significantly enhance long-term returns by reducing the drag on performance. Compared to industry averages, these costs are competitive. Maintaining a focus on cost efficiency is crucial; regularly review your portfolio to ensure fees remain low and consider replacing higher-cost funds with more cost-effective alternatives when possible.

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