Balanced and moderately diversified portfolio with a strategic focus on technology and European markets
Report created on Sep 3, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
VT Vanguard Total World Stock Index Fund ETF Shares
VT - US9220427424 50.00% -
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 20.00% -
VG Vanguard FTSE Europe Index Fund ETF Shares
VGK - US9220428745 20.00% -
ZK ZKB Gold ETF
ZKBGF 10.00%
This portfolio is structured around a core of global and sector-specific ETFs, with a significant allocation towards technology and European equities. The Vanguard Total World Stock Index Fund ETF Shares form half of the portfolio, providing broad market exposure. The Invesco NASDAQ 100 and Vanguard FTSE Europe Index Fund ETF Shares together make up 40%, indicating a targeted approach towards tech innovation and European stability. The inclusion of the ZKB Gold ETF adds a traditional hedge against market volatility. This composition suggests a balanced approach, leveraging growth potential while maintaining some defensive positioning.
Growth
Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 13.47%, with a maximum drawdown of -27.82%. These figures suggest a relatively strong performance, especially considering the balanced nature of the portfolio. The days contributing most to returns highlight the impact of significant market movements on portfolio growth. This historical performance, while indicative of past success, emphasizes the importance of understanding market cycles and the potential for volatility.
Projection
Monte Carlo simulations, based on 1,000 iterations, project a wide range of outcomes with a median annualized return of 14.93%. The simulations suggest a strong likelihood of positive returns, with 992 out of 1,000 scenarios ending profitably. However, as with all predictive models, it's crucial to remember that these projections are based on historical data and assumptions, which cannot guarantee future performance. This analysis helps in understanding potential risks and returns but should be one of many tools used in decision-making.
Asset classes
- Stocks 89%
- Cash 1%
The portfolio's asset allocation leans heavily towards stocks (89%), with a minimal cash reserve (1%). This distribution aligns with the portfolio's balanced but growth-oriented strategy. However, the lack of diversification into other asset classes like bonds or real estate might limit opportunities to reduce volatility and improve returns during different market conditions. Expanding asset class diversity could provide additional stability and income sources, especially in uncertain markets.
Sectors
- Technology 25%
- Financials 13%
- Industrials 10%
- Consumer Discretionary 10%
- Telecommunications 8%
- Health Care 8%
- Consumer Staples 6%
- Basic Materials 3%
- Energy 3%
- Utilities 2%
- Real Estate 2%
With a quarter of the portfolio in technology and significant allocations in financial services and industrials, there's a clear growth orientation. This sectoral distribution aligns with the portfolio's aim for high growth but also introduces sector-specific risks, particularly from market corrections in tech. Balancing with more defensive sectors or diversifying further could mitigate these risks while still capturing growth opportunities in emerging trends.
Regions
- North America 20%
- Europe Developed 20%
The geographic allocation, with equal weightings in North America and developed Europe, reflects a strong focus on stable, developed markets. This approach benefits from economic stability and mature industries but may miss out on the higher growth potential of emerging markets. Incorporating a measured exposure to diversified emerging markets could enhance growth prospects and global diversification.
Market capitalization
- Mega-cap 42%
- Large-cap 28%
- Mid-cap 15%
- Small-cap 3%
The portfolio's emphasis on mega and big-cap stocks (70% combined) supports its balanced risk profile, leveraging the stability and lower volatility of large companies. However, the relatively small allocation to medium, small, and micro-caps limits exposure to high-growth potential firms. Incrementally increasing allocations to smaller caps could offer higher growth opportunities, albeit with increased 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.
Based on the Efficient Frontier analysis, the portfolio appears well-constructed for its risk-return profile but may benefit from slight adjustments to enhance diversification and reduce volatility. This optimization process, while theoretical, suggests that even a well-balanced portfolio can often find opportunities to improve its risk-return ratio through careful reallocation among current assets.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard FTSE Europe Index Fund ETF Shares 2.90%
- Vanguard Total World Stock Index Fund ETF Shares 1.70%
- Weighted yield (per year) 1.53%
The dividend yields, ranging from 0.50% to 2.90%, contribute to the portfolio's total yield of 1.53%. This income stream, while modest, complements capital gains as a source of total return. Given the portfolio's growth focus, the yield is reasonable, but there may be room to optimize income through higher-yielding investments without significantly increasing risk.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard FTSE Europe Index Fund ETF Shares 0.13%
- Vanguard Total World Stock Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.09%
With a total expense ratio (TER) of 0.09%, the portfolio benefits from low costs, supporting better long-term performance. This efficiency is commendable, as lower costs directly translate to higher net returns for investors. Continuously monitoring and managing investment costs remains crucial, especially when considering potential additions or adjustments to the portfolio.
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