A balanced portfolio with high North American exposure and a focus on technology sectors

Report created on Dec 16, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed primarily of ETFs, with the Vanguard S&P 500 UCITS Acc making up 60%, Invesco EQQQ NASDAQ-100 UCITS ETF Acc at 25%, and iShares MSCI World Small Cap UCITS ETF USD (Acc) at 15%. This structure heavily emphasizes large-cap U.S. equities, particularly those in the S&P 500 and NASDAQ-100, which are known for their stability and growth potential. The inclusion of a small-cap ETF adds some diversification, albeit limited. Having a concentrated allocation in a few ETFs simplifies management but could limit exposure to other asset classes. Consider diversifying further by including additional asset classes like bonds or commodities to reduce risk.

Growth Info

Historically, the portfolio has performed well with a compound annual growth rate (CAGR) of 16.14% and a maximum drawdown of -17.38%. This suggests a robust return over time, albeit with some volatility. While past performance is not indicative of future results, the portfolio's historical resilience during downturns is noteworthy. It's essential to remember that historical data can only provide insights based on past market conditions, which may not repeat. Regularly reviewing performance against benchmarks can help ensure the portfolio remains aligned with your financial goals.

Projection Info

Using Monte Carlo simulation, which leverages historical data to predict future outcomes, the portfolio shows a potential range of returns. With 1,000 simulations, the 5th percentile projects a 150.63% return, while the median (50th percentile) is 627.65%, and the 67th percentile is 885.05%. This method provides a probabilistic assessment of future performance, helping investors understand potential risks and rewards. However, it's important to note that these are just projections and not guarantees. Regularly revisiting projections and adjusting the portfolio as needed can help manage expectations and align with changing market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, accounting for 99.92% of the total allocation. This high concentration in equities can drive growth but also increases exposure to market volatility. With minimal exposure to other asset classes like bonds or cash, the portfolio may not provide sufficient downside protection during market downturns. Diversifying into other asset classes could potentially reduce risk and smooth out returns over time. Consider incorporating fixed income or alternative investments to balance the high equity exposure and achieve a more diversified portfolio.

Sectors Info

  • Technology
    34%
  • Consumer Discretionary
    12%
  • Financials
    10%
  • Telecommunications
    10%
  • Health Care
    10%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Real Estate
    3%
  • Basic Materials
    2%
  • Utilities
    2%

The sector allocation is heavily skewed towards technology, which comprises 34.46% of the portfolio. Other significant sectors include consumer cyclicals, financial services, and communication services. While this concentration in technology can offer high growth potential, it also exposes the portfolio to sector-specific risks. A downturn in the tech industry could significantly impact overall performance. Diversifying sector exposure by increasing allocations in underrepresented sectors like utilities or healthcare can help mitigate this risk and provide a more balanced approach.

Regions Info

  • North America
    94%
  • Europe Developed
    3%
  • Japan
    2%

Geographically, the portfolio is overwhelmingly concentrated in North America, with 94.11% of assets allocated there. This focus on a single region can lead to regional risk, particularly if economic or political conditions in North America change. Although this concentration has benefited from strong U.S. market performance, it may limit exposure to growth opportunities in other regions. Expanding geographic diversification by increasing investments in Europe, Asia, or emerging markets could enhance growth potential and reduce regional 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.

Optimizing the portfolio using the Efficient Frontier can enhance the risk-return trade-off by adjusting the allocation among existing assets. This approach aims to achieve the highest possible return for a given level of risk. By analyzing the current asset mix, you can identify opportunities to rebalance and improve efficiency without necessarily adding new investments. Regularly reviewing and rebalancing the portfolio ensures it remains aligned with the Efficient Frontier, maximizing potential returns while managing risk.

Ongoing product costs Info

  • Invesco EQQQ NASDAQ-100 UCITS ETF Acc 0.35%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.18%

The portfolio's total expense ratio (TER) is 0.18%, with the Vanguard S&P 500 UCITS Acc being the most cost-effective at 0.07%. Keeping costs low is crucial for maximizing returns over time, as high fees can erode gains. The relatively low TER is a positive aspect, but it's essential to continually monitor costs, especially if considering adding new funds. Comparing expense ratios of potential investments can help identify cost-effective options that align with your investment strategy.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey