A globally diversified portfolio with a balanced risk profile focusing on broad equity exposure

Report created on Jan 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is solely composed of the Vanguard FTSE All-World UCITS ETF, representing 100% of the holdings. This ETF provides exposure to a wide range of global equities, aligning with a typical balanced portfolio composition. This structure simplifies management and offers broad diversification across various sectors and regions. However, the lack of fixed income or alternative assets may limit risk mitigation during market downturns. Consider incorporating other asset classes to balance equity exposure and potentially reduce volatility.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 12.69%. This suggests strong growth over time, outperforming many typical benchmarks. However, the maximum drawdown of -33.45% indicates significant potential losses during market downturns. It's crucial to remember that past performance does not guarantee future results. To better manage risk, consider diversifying into other asset classes to cushion against potential future downturns.

Projection Info

Forward projections using Monte Carlo simulations suggest a range of potential outcomes, with a 50th percentile return of 429.76% and an annualized return of 13.63%. Monte Carlo simulations use historical data to estimate the likelihood of various outcomes, providing a probabilistic view of future performance. While these projections are optimistic, they rely on past data and cannot predict future market conditions with certainty. Consider using these insights to guide expectations but remain flexible to adjust for changing market dynamics.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is heavily weighted towards stocks, with 99.95% in equities. This high concentration in a single asset class can lead to substantial growth potential but also increases exposure to market volatility. Compared to a balanced benchmark, which typically includes bonds and other asset classes, this portfolio lacks diversification. Consider introducing fixed income or alternative investments to achieve a more balanced risk-return profile, especially if seeking to reduce volatility.

Sectors Info

  • Technology
    26%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation is diverse, with a notable emphasis on technology at 25.65%. This aligns with global trends where tech has been a significant growth driver. However, such concentration can lead to higher volatility, particularly during periods of regulatory changes or interest rate hikes. Balancing sector weights by increasing exposure to less represented sectors may enhance diversification and mitigate sector-specific risks. This approach can help stabilize returns across different market conditions.

Regions Info

  • North America
    66%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily skewed towards North America, comprising 65.54% of the allocation. While this reflects the dominance of the U.S. market, it may expose the portfolio to regional risks. Compared to global benchmarks, this allocation is typical but may benefit from increased exposure to emerging markets or underrepresented regions like Latin America and Africa. Diversifying geographically can reduce risk and capture growth opportunities in different economic cycles.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio's Total Expense Ratio (TER) is 0.22%, which is competitive and supports better long-term performance by minimizing costs. Low fees are advantageous as they preserve more of the portfolio's returns over time. While the TER is favorable, regularly reviewing and comparing costs against other investment options can ensure you're getting the best value. Consider evaluating whether there are even lower-cost alternatives without compromising on diversification or performance.

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