ESG-focused portfolio with strong North American concentration and cautious risk profile
Report created on Sep 27, 2024Risk profile
3/7
Diversification profile
4/5
Positions
-
V3 Vanguard ESG North America All Cap UCITS ETF USD Accumulation EUR
V3YA - IE000O58J820 60.00% -
V3 Vanguard ESG Developed Europe All Cap UCITS ETF EUR Accumulation
V3DA - IE000QUOSE01 20.00% -
V3 Vanguard ESG Emerging Markets All Cap UCITS ETF USD Acc EUR
V3MA - IE000KPJJWM6 10.00% -
V3 Vanguard ESG Developed Asia Pacific All Cap UCITS ETF USD Accumulating EUR
V3PA - IE000GOJO2A3 10.00%
This portfolio is heavily weighted in ETFs, with a 60% allocation to North America and a significant 20% in Europe. The remaining 20% is divided between emerging markets and the Asia Pacific region. Such a composition is typical for cautious investors seeking broad market exposure. This allocation leans heavily on developed markets, which can offer stability but may limit growth potential from emerging regions. For a more balanced approach, consider increasing exposure to emerging markets to capture higher growth opportunities.
Growth
The portfolio has demonstrated a strong historic CAGR of 18.92%, suggesting robust growth. However, the maximum drawdown of -8.29% indicates potential vulnerability during market downturns. Comparing this to benchmarks, the portfolio's performance appears resilient, especially for a cautious profile. It’s essential to remember that past performance is not indicative of future results, but maintaining a diversified approach can help mitigate risks.
Projection
Monte Carlo simulations, which use historical data to predict future outcomes, show a 50th percentile return of 742.25%, with all simulations yielding positive returns. This suggests a strong potential for future growth, though it's based on past trends that may not continue. While the projections are promising, it's crucial to regularly review and adjust the portfolio to align with changing market conditions and personal goals.
Asset classes
- Stocks 100%
The portfolio is nearly entirely composed of stocks, accounting for 99.87% of the allocation. This heavy stock focus can drive growth but may increase volatility. For cautious investors, incorporating bonds or other fixed-income assets could provide stability and reduce risk. Aligning asset classes with investment goals and risk tolerance is key to maintaining a balanced portfolio.
Sectors
- Technology 27%
- Financials 19%
- Health Care 13%
- Consumer Discretionary 12%
- Telecommunications 8%
- Industrials 8%
- Consumer Staples 6%
- Real Estate 3%
- Basic Materials 3%
The portfolio is diversified across several sectors, with a notable concentration in technology (27.26%) and financial services (19.07%). This sectoral allocation aligns with global trends but may expose the portfolio to sector-specific risks, such as tech volatility during interest rate changes. Balancing exposure across sectors can help mitigate these risks and ensure steady performance.
Regions
- North America 60%
- Europe Developed 20%
- Japan 6%
- Asia Emerging 5%
- Asia Developed 5%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
Geographic exposure is heavily tilted towards North America (59.67%) and Europe (19.95%), with limited representation in emerging markets. While this provides stability, it may miss out on higher growth potential from underrepresented regions. To enhance diversification, consider increasing allocations to emerging markets and other regions with growth potential.
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 helps find the best risk-return ratio based on current asset allocations. This approach does not guarantee diversification but can enhance performance by adjusting weights. Regularly reviewing allocations can ensure they align with financial goals and market conditions.
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