A low cost global equity portfolio tilted to the United States and focused on long term growth

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This setup suits an investor who is comfortable with meaningful ups and downs in pursuit of strong long term growth. They typically have a multi decade horizon, such as saving for retirement far in the future or building generational wealth. Short term drops of 30 percent or more would be seen as unsettling but acceptable rather than a trigger to sell. They value simplicity, prefer low maintenance strategies, and are happy to “own the market” instead of picking individual winners. A moderate to moderately high risk tolerance is key, along with a plan that does not rely on drawing significant income from the portfolio for many years.

Positions

  • Vanguard S&P 500 UCITS ETF USD Accumulation
    VUAA - IE00BFMXXD54
    50.00%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    VWRA - IE00BK5BQT80
    50.00%

This portfolio is made of just two broad equity funds split roughly fifty fifty between a US index and a global index. That means it is essentially 100 percent in shares with no bonds or cash buffer. For a “balanced” risk label this is actually quite growth heavy, but the two funds do line up well with popular global equity benchmarks. Having only two positions keeps things simple and easy to maintain. However both funds hold many of the same large companies which creates overlap. Trimming duplication and deciding on a clearer split between pure US and global exposure could tighten the overall structure.

Growth Info

Historically this mix has delivered a strong compound annual growth rate of about 14.6 percent. CAGR, or Compound Annual Growth Rate, is like the average speed of a car over a long drive smoothing out bumps along the way. A hypothetical £10,000 invested over the full backtest would have grown multiple times, broadly in line with global equity benchmarks. At the same time the portfolio has seen a maximum drawdown of around minus 34 percent, which is a big temporary drop and typical for stock heavy allocations. This shows that the growth is attractive but comes with sharp swings, so planning for bad years is just as important as celebrating the good ones.

Projection Info

The Monte Carlo analysis runs 1,000 simulated futures using past returns and volatility to generate many possible paths. Think of it as rolling the dice on markets again and again to see a range of outcomes, not just a single forecast. Median results around 542 percent indicate that over long periods equities have historically rewarded patience, while the 5th percentile near 119 percent shows that even weaker scenarios still grew in most simulations. However simulations reuse history and assume similar patterns, which may not repeat. It helps to treat these ranges as rough weather maps rather than precise predictions and make sure spending plans are flexible if markets underperform.

Asset classes Info

  • Stocks
    100%
  • Other
    0%
  • No data
    0%

All of the allocation sits in one asset class: equities. This is excellent for long term growth potential but means the portfolio will rise and fall closely with global stock markets. A balanced approach in theory mixes shares with steadier assets like bonds or cash to soften the ride. Right now the structure matches an aggressive growth style more than a middle of the road profile, despite the “balanced” label. For someone wanting smoother returns, gradually adding a small slice of lower volatility assets outside equities could make the experience more comfortable without abandoning the overall growth focus.

Sectors Info

  • Technology
    32%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is nicely spread across ten major areas, with technology leading at around a third of the portfolio, followed by financials, consumer and communication‑related businesses. This sector mix is very similar to broad global and US market benchmarks, which is a positive sign that there is no big unintended bet on a niche industry. A tech heavy tilt often boosts returns in low rate, growth friendly environments but can feel rough when interest rates rise or sentiment turns. Keeping the broad market approach avoids trying to guess which sector wins next and supports a “buy the whole market” philosophy that has worked well historically.

Regions Info

  • North America
    83%
  • Europe Developed
    7%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically the portfolio is heavily tilted towards North America at about 83 percent, with modest exposure to developed Europe and smaller positions across Asia and other regions. This is broadly in line with global market weights, since the US currently dominates world stock market value, so the allocation is well aligned with common benchmarks. The trade off is that returns will be driven mostly by US economic and policy conditions. Some investors are happy with this given US market strength in the last decade. Others prefer a slightly higher weight to non US regions to reduce reliance on one economy and currency over very long horizons.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    35%
  • Mid-cap
    17%
  • Small-cap
    1%
  • Micro-cap
    0%

By market size the portfolio leans strongly towards mega and large companies, with nearly all assets in big established firms and only a tiny slice in smaller businesses. This structure closely matches major indices and is a strong indicator of mainstream diversification. Large companies tend to be more stable and liquid, which usually means less volatility than a small cap heavy approach. The downside is missing some of the higher risk higher reward potential of smaller firms. Anyone seeking extra punch could add a modest tilt to smaller companies, while those happy with steadier blue chip style exposure can keep this large cap orientation as their core.

Redundant positions Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    Vanguard S&P 500 UCITS ETF USD Accumulation
    High correlation

Both funds in this portfolio are highly correlated, meaning they tend to move up and down together because they share many of the same underlying companies. Correlation is a measure of how similarly assets behave, a bit like checking whether two TV channels show the same film. High correlation is expected here because a US index is a big part of the global index. This overlap does not ruin the portfolio but it does reduce diversification benefits from holding two funds. Simplifying to one main global building block or clearly defining the role of each fund can sharpen risk control and make future rebalancing easier.

Ongoing product costs Info

  • Vanguard S&P 500 UCITS ETF USD Accumulation 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.19%
  • Weighted costs total (per year) 0.13%

Total ongoing costs around 0.13 percent per year are impressively low and compare very favourably with both active funds and many other index products. Costs work like friction on a moving wheel: the lower they are, the more of the market’s return you actually keep over decades. By sticking to broad, low fee index trackers this portfolio gives itself a built in performance edge without having to pick winners. There is little room or need to squeeze fees further without losing the simplicity and diversification on offer here. Maintaining this disciplined focus on low costs is one of the biggest strengths of the current setup.

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.

On a risk versus return basis this portfolio already sits close to the efficient frontier for pure equity exposure. The Efficient Frontier is the set of portfolios that offer the best possible return for each level of risk given a fixed menu of assets. Because both holdings are so similar, shifting weights between them does not dramatically change the risk profile. To truly adjust efficiency you would need to introduce assets that behave differently, such as steadier fixed income or diversifying alternatives. If the goal is maximum long term growth, staying near 100 percent equities is reasonable, but if smoother returns matter more then adding lower risk components can push the mix to a more comfortable point on the curve.

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