Globally diversified stock and cash mix with strong low volatility tilt and conservative risk profile
Report created on May 7, 2024Risk profile
2/7
Diversification profile
5/5
Positions
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VW Vanguard FTSE All-World UCITS ETF USD Accumulation
VWCE - IE00BK5BQT80 50.00% -
XE Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C
XEON - LU0290358497 50.00%
The portfolio is split 50% into a global equity ETF and 50% into an ETF tracking an overnight euro rate, which behaves much like a very low-risk cash or money-market position. This creates a simple two-holding structure that’s easy to understand and manage. From an educational angle, mixing a growth engine (stocks) with a stabilizer (cash-like asset) is a classic way to dial down risk without exiting markets completely. Here the stabilizer half is very strong. The key takeaway is that this setup is well-suited to conservative investors who want meaningful global equity exposure, but only after cutting overall volatility roughly in half versus an all‑equity approach.
Growth
Over the observed period, €1,000 grew to about €1,528, implying a compound annual growth rate (CAGR) of 6.49%. CAGR is the “average yearly speed” of growth, smoothing out ups and downs. This lags both the US market and global market, which is expected because half the portfolio sits in a low‑yield overnight ETF. However, the worst peak‑to‑trough loss (max drawdown) was only -17.91%, significantly milder than the roughly -34% drops in the benchmarks. That’s a clear trade-off: lower long‑term return, but much smaller crashes. For someone prioritizing capital preservation and sleep‑at‑night comfort, that’s a very reasonable and deliberate balance.
Asset classes
- Other 50%
- Stocks 50%
Asset‑class wise, the split is clean: about 50% in global stocks and 50% in an “other” category that functions like ultra‑short‑term cash or cash equivalents. Compared with a typical global 60/40 stock‑bond mix, this is even more conservative because half the assets are in something with near‑cash risk rather than longer‑term bonds. That makes price swings smaller, but also caps long‑term growth. For someone looking to gradually build wealth without large drawdowns, this allocation is well-balanced and aligns closely with global standards for conservative profiles. A useful takeaway: any future shift in risk tolerance could be implemented simply by adjusting this single 50/50 split.
Sectors
- Technology 13%
- Financials 8%
- Industrials 6%
- Consumer Discretionary 5%
- Health Care 4%
- Telecommunications 4%
- Consumer Staples 3%
- Basic Materials 2%
- Energy 2%
- Utilities 1%
- Real Estate 1%
This breakdown covers the equity portion of your portfolio only.
Within the equity slice, sector exposure is broadly diversified, with technology the largest at around 13% of the overall portfolio, then financials, industrials, and consumer‑oriented areas. Importantly, that 13% tech weight is only on the whole portfolio; within just the equity half, tech is still meaningful but not extreme. Sector diversification matters because different parts of the economy lead or lag at different times. For example, more cyclical areas can struggle in recessions, while defensive sectors may hold up better. The portfolio’s sector composition matches benchmark data, which is a strong indicator of diversification and reduces the risk of any single economic theme dominating outcomes.
Regions
- North America 31%
- Europe Developed 8%
- Japan 3%
- Asia Developed 3%
- Asia Emerging 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
This breakdown covers the equity portion of your portfolio only.
Geographically, the equity exposure leans toward North America, with additional allocations to developed Europe, Japan, and various Asian and emerging regions. Again, these numbers are for the full portfolio, so the effective equity-region weights are about double those percentages within the stock slice. This profile is broadly similar to global indices, where North America has a large share due to company size, not just country count. Such alignment is beneficial because it mirrors the global opportunity set rather than making big regional bets. The trade-off is less chance of dramatically outperforming by picking one favored region, but significantly lower risk of being wrong on a big regional call.
Market capitalization
- Mega-cap 24%
- Large-cap 17%
- Mid-cap 8%
This breakdown covers the equity portion of your portfolio only.
Market‑cap exposure is skewed toward mega‑cap and large‑cap companies, with meaningful but smaller allocations to mid‑caps and essentially no notable small‑cap tilt. Large firms tend to be more stable, widely followed, and better funded, which usually leads to lower volatility but sometimes slightly lower long‑run returns than riskier small caps. For conservative investors, that stability is often more valuable than chasing extra growth. Here, the dominance of bigger companies complements the 50% cash‑like allocation, reinforcing the portfolio’s generally steady behavior. The key takeaway: this structure is designed more for reliability and resilience than for aggressive growth from smaller, less proven businesses.
True holdings
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NV NVIDIA Corporation 2.11%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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AA Apple Inc 1.96%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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MS Microsoft Corporation 1.48%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
AM Amazon.com Inc 1.02%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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GO Alphabet Inc Class A 0.92%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 0.79%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
AV Broadcom Inc 0.75%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
GO Alphabet Inc Class C 0.75%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
ME Meta Platforms Inc. 0.72%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
TS Tesla Inc 0.58%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard FTSE All-World UCITS ETF USD Accumulation
- Top 10 total 11.08%
This breakdown covers the equity portion of your portfolio only.
Looking through the global equity ETF’s top holdings, exposure is spread across many of the world’s largest companies, with individual names mostly around or below 2% of the total portfolio. There is some overlap among big technology and consumer names, but because only one equity ETF is used, hidden concentration is limited. Coverage of just over 11% of the portfolio simply reflects that top‑10 data doesn’t show the thousands of smaller positions underneath. In practice, this means risk is diversified across a very broad set of companies. The main concentration risk isn’t single stocks, but the overall 50% equity vs. 50% cash‑like structure.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows a very strong tilt toward low volatility (97%), with other factors mostly neutral and yield somewhat low. Low volatility means the equities are, on average, the steadier names in the market, which historically often fall less in downturns but may lag slightly in roaring bull phases. Factor exposure is like choosing ingredients in a recipe; here, calmness and resilience are prioritized. The high low‑vol tilt lines up perfectly with the 50% cash‑like allocation, giving a double layer of defensiveness. The low yield simply reflects a focus on total return and quality rather than chasing high dividends, which often come with extra risks.
Risk contribution
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Vanguard FTSE All-World UCITS ETF USD Accumulation
Weight: 50.00% 99.7% -
Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C
Weight: 50.00% 0.3%
Risk contribution highlights how much each holding drives the portfolio’s overall ups and downs, which can differ from simple weights. Here, the global equity ETF is 50% of the assets but contributes almost all the risk (about 99.7%), while the overnight rate ETF barely moves the needle. This is completely logical: stocks swing far more than cash‑like instruments. The important insight is that any perceived change in risk will mostly come from adjusting the equity percentage, not from tinkering within the cash‑like allocation. If volatility ever feels too high or too low, shifting that 50/50 split slightly will have a direct, predictable impact on the portfolio’s behavior.
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.
On the risk‑return chart, the current mix sits essentially on the efficient frontier, meaning that for its chosen risk level it’s using the holdings in a very efficient way. The Sharpe ratio of 0.53 is slightly below the optimal portfolio’s 0.64, but that “optimal” point involves roughly double the risk. Within this conservative risk band, there’s no clear sign of wasted potential; you’re getting a fair expected return for the volatility taken. The minimum‑variance portfolio would cut risk even more, but expected returns would also drop sharply. The main takeaway is that any future changes are more about personal comfort with risk than about fixing an inefficient allocation.
Ongoing product costs
- Vanguard FTSE All-World UCITS ETF USD Accumulation 0.19%
- Xtrackers II EUR Overnight Rate Swap UCITS ETF 1C 0.10%
- Weighted costs total (per year) 0.14%
Total ongoing fund costs (TER) sit around 0.14% per year, which is impressively low for such broad diversification. TER, or Total Expense Ratio, is like a small annual service fee that quietly reduces returns. Keeping this number low leaves more of the portfolio’s growth in your hands. Over decades, even a 0.5–1.0 percentage‑point difference can compound into a surprisingly large gap. This allocation is well-balanced and aligns closely with global standards for cost‑efficient investing. From a cost perspective, there’s very little to optimize; the focus can stay on risk levels, time horizon, and saving rate, rather than hunting for marginally cheaper products.
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