A balanced portfolio with global equity exposure and a focus on small-cap and value factors

Report created on Feb 28, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed entirely of equity ETFs, with a significant focus on multi-factor strategies, small-cap, and value investments. The largest position, JPM Global Equity Multi-Factor UCITS ETF, accounts for 25% of the portfolio, providing broad global equity exposure. Such a composition aligns well with a balanced risk profile, offering potential for growth while maintaining diversification. However, a lack of fixed-income or alternative assets might expose the portfolio to equity market volatility. Consider diversifying into other asset classes to mitigate risk and smooth returns, especially during market downturns.

Growth Info

Historically, this portfolio has delivered a strong compound annual growth rate (CAGR) of 12.25%, outperforming many traditional equity benchmarks. The maximum drawdown of -18.63% suggests moderate volatility, consistent with a balanced risk profile. This performance indicates resilience and growth potential, but it's important to remember that past performance does not guarantee future results. To maintain this performance level, consider regularly reviewing asset allocation and rebalancing to capture potential gains and manage risks.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, shows potential for robust returns with a median projection of 307.8% growth. However, the range of outcomes is wide, with the 5th percentile at 31.3% and the 67th at 432.6%. This highlights the uncertainty and variability in future returns. While the projections are promising, they rely on historical data, which may not fully capture future market conditions. Regularly reassess the portfolio's alignment with your risk tolerance and goals to navigate potential market changes.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive focus on equities, with 100% allocation, limits diversification benefits. While equities offer high growth potential, they also introduce significant volatility, especially in turbulent markets. Diversifying into other asset classes like bonds or real estate could reduce risk and provide more stable returns over time. Consider incorporating a small percentage of fixed income to balance the high equity exposure and potentially enhance risk-adjusted returns.

Sectors Info

  • Financials
    18%
  • Technology
    14%
  • Industrials
    13%
  • Consumer Discretionary
    11%
  • Health Care
    8%
  • Consumer Staples
    7%
  • Basic Materials
    6%
  • Telecommunications
    6%
  • Real Estate
    6%
  • Energy
    6%
  • Utilities
    4%

The sector allocation is well-distributed, with financial services, technology, and industrials leading the way. This balanced approach ensures exposure to various economic cycles and trends. However, the technology sector's 14% weight could introduce volatility, especially during interest rate changes. Staying informed about sector trends and adjusting allocations as necessary can help mitigate risks and capitalize on growth opportunities. Regularly review sector performance and adjust weights to align with market conditions and personal risk tolerance.

Regions Info

  • North America
    52%
  • Europe Developed
    25%
  • Asia Emerging
    7%
  • Japan
    5%
  • Asia Developed
    5%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    1%
  • Europe Emerging
    1%

The portfolio is heavily weighted towards North America (52%) and Europe Developed (25%), offering substantial exposure to established markets. However, emerging markets account for only a small portion, potentially limiting growth opportunities. Increasing exposure to Asia and other emerging regions could enhance diversification and capture higher growth potential. Consider gradually increasing allocations to underrepresented regions to balance the geographic exposure and potentially improve long-term returns.

Market capitalization Info

  • Mid-cap
    30%
  • Large-cap
    26%
  • Small-cap
    20%
  • Mega-cap
    16%
  • Micro-cap
    7%

The portfolio is diversified across market capitalizations, with a notable emphasis on medium (30%) and big (26%) caps. This distribution offers a balance between growth potential and stability. However, the 20% allocation to small caps introduces higher volatility, which could impact overall portfolio risk. Regularly assess the market cap exposure to ensure it aligns with your risk tolerance and investment goals. Consider adjusting the balance between large and small caps to optimize risk and return.

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 could potentially be optimized using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. By adjusting allocations, you can aim to achieve higher returns for a given level of risk or reduce risk for a desired return level. Regularly review and rebalance the portfolio to ensure it remains on the Efficient Frontier, considering any changes in market conditions or personal risk tolerance.

Ongoing product costs Info

  • iShares Edge MSCI EM Value Factor UCITS ETF USD (Acc) 0.40%
  • Franklin Libertyshares Icav - Franklin LibertyQ Emerging Markets Ucits Etf 0.45%
  • JPM Global Equity Multi-Factor UCITS ETF USD Acc 0.19%
  • WisdomTree Emerging Markets SmallCap Dividend UCITS ETF 0.54%
  • Xtrackers MSCI World Momentum UCITS ETF 0.25%
  • Xtrackers MSCI World Value UCITS ETF 0.25%
  • SPDR® MSCI USA Small Cap Value Weighted UCITS ETF USD Acc EUR 0.30%
  • SPDR® MSCI Europe Small Cap Value Weighted UCITS ETF EUR Acc 0.30%
  • Weighted costs total (per year) 0.28%

The portfolio's total expense ratio (TER) of 0.28% is competitive, supporting long-term performance by minimizing costs. Low costs are crucial for maximizing net returns, as they compound over time. Regularly review the TER to ensure it remains competitive and aligns with your investment strategy. Consider replacing higher-cost ETFs with lower-cost alternatives if they offer similar exposure and performance potential.

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