A growth focused equity portfolio with strong regional tilts and solid long term return potential

Report created on Nov 22, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is built entirely from three equity ETFs with a simple 40/40/20 split, which keeps things easy to understand and monitor. The mix blends a high dividend Asia Pacific strategy with a growth-heavy Nasdaq tracker and an SRI-focused global fund. For a “balanced” risk profile, this is actually very growth-oriented, because there are no bonds or cash buffers. That matters because 100% stocks can swing sharply when markets fall. To better match a classic balanced profile, adding some defensive assets like high-quality bonds or a cash-like sleeve could smooth the ride and make drawdowns more manageable, especially in stressful markets.

Growth Info

Based on the given CAGR of 13.46%, every €10,000 hypothetically invested at the start would have grown to about €35,000 over the measured period. That’s a very strong outcome, comfortably above what many broad market benchmarks have delivered over long horizons. However, the max drawdown of –33.46% shows that the portfolio can lose roughly a third of its value in a severe downturn, which is typical for all‑equity setups. It’s important to remember that these results come from a specific past environment. Markets change, and past performance cannot guarantee future returns, so expectations should stay flexible and conservative.

Projection Info

The Monte Carlo analysis, using 1,000 simulations, shows an annualized return around 14.04%, with a very wide range of outcomes. Monte Carlo is basically a “what if” machine: it shakes historical patterns and runs thousands of alternate futures to see how the portfolio might behave. Here the 5th percentile ending at about 82% of today’s value reflects a tough but plausible downside path, while the median and upper percentiles suggest substantial growth. Since these simulations rely heavily on historical return and volatility patterns, they may be overly optimistic if future markets are weaker or more volatile, so they’re best treated as a rough guide, not a promise.

Asset classes Info

  • Stocks
    100%

All assets in this portfolio are stocks, which pushes growth potential but leaves no built‑in stabilizer if markets slide. Equity-only allocations tend to work well over very long horizons but can be psychologically tough during multi‑year drawdowns. Compared with a more typical “balanced” benchmark that might hold 40–60% in bonds or defensive assets, this setup is more aggressive and will likely see larger ups and downs. If the goal is to stay closer to a balanced risk profile, gradually introducing a modest slice of lower‑volatility assets could make the overall experience smoother without completely sacrificing the strong long-term growth orientation already in place.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Telecommunications
    10%
  • Consumer Discretionary
    10%
  • Basic Materials
    9%
  • Industrials
    8%
  • Real Estate
    7%
  • Health Care
    4%
  • Consumer Staples
    4%
  • Utilities
    2%
  • Energy
    2%

Sector-wise, there’s a heavy tilt toward technology at 30%, backed by meaningful exposure to financial services, communication services, and consumer cyclicals. This is very consistent with modern equity benchmarks, many of which are also tech‑tilted, and that alignment is a good sign of being in step with global market structure. However, tech-heavy portfolios can be more sensitive when interest rates rise or sentiment toward growth stocks cools. The presence of real estate, basic materials, and utilities adds some cyclical and defensive balance, which is helpful. Keeping an eye on whether one sector drifts far beyond this mix over time can help avoid overconcentration in a single theme.

Regions Info

  • North America
    59%
  • Asia Developed
    20%
  • Australasia
    16%
  • Asia Emerging
    2%
  • Japan
    2%
  • Europe Developed
    1%

Geographically, the portfolio leans strongly toward North America at 59%, with substantial Asia Pacific exposure through Asia Developed and Australasia. This creates a distinct tilt toward two major economic blocs rather than a perfectly global balance, but it still reaches multiple regions, which supports diversification. Being close to North American weights seen in global benchmarks is useful because it captures many of the world’s largest, most innovative companies. On the flip side, Europe and emerging markets are barely represented, which may miss some regional growth or diversification opportunities. Gradually nudging exposure toward a more globally even mix could help spread political and currency risk over more economies.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    36%
  • Mid-cap
    18%
  • Small-cap
    1%

Market cap exposure is dominated by mega and big companies, with 80% in those segments and only a small slice in mid caps and virtually no small caps. This resembles many global benchmarks and offers welcome stability, because large companies usually have more diversified revenues, stronger balance sheets, and better access to capital. That alignment with market norms is a positive sign and supports smoother behaviour in crises compared with small-cap heavy portfolios. However, smaller companies can sometimes drive higher long-term growth, at the cost of more volatility. If extra growth potential is desired and short-term swings are tolerable, a slightly larger mid/small-cap allocation could be introduced very cautiously.

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.

From an Efficient Frontier perspective, which is the set of portfolios offering the best risk-return trade-off using available assets, this mix sits on the more aggressive side. Efficiency here simply means getting the most expected return for a given level of volatility with these three ETFs, not necessarily being perfectly diversified or low risk. Shifting weights between the dividend, growth, and SRI components could slightly improve the balance between expected return and drawdown risk. However, because all three are equities, any efficient mix will still behave like a growth portfolio. To truly move the Efficient Frontier toward lower volatility, adding a new defensive asset category would be necessary.

Ongoing product costs Info

  • iShares MSCI World SRI UCITS ETF EUR (Acc) 0.23%
  • iShares Asia Pacific Dividend UCITS ETF USD (Dist) EUR 0.59%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • Weighted costs total (per year) 0.43%

The weighted average cost (TER) of about 0.43% is quite reasonable for a three-ETF portfolio with this level of diversification. Costs are one of the few factors directly under investor control, and small differences compound meaningfully over decades. These levels are competitive relative to many actively managed products and support better long-term outcomes by letting more return stay in the portfolio. Still, ultra-low-cost alternatives do exist in many markets. Periodically checking if similar exposures are available at lower cost—without sacrificing liquidity, tracking quality, or simplicity—can further improve net returns, especially over long horizons like 15–30 years of continuous investing.

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