Concentrated equity portfolio with strong US tech tilt and high growth orientation

Report created on Nov 11, 2024

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

Positions

The portfolio holds four equity ETFs with large individual weights: a US information technology sector ETF ~28%, a core MSCI Europe ETF ~25%, a Nasdaq‑100 ETF ~24%, and a MSCI World ETF ~23%, resulting in a near 100% equity allocation. This means exposure is concentrated in a few overlapping products rather than many distinct holdings. Overlap matters because multiple funds can own the same large stocks which reduces the benefit of diversification and can increase single‑stock or sector risk. Recommendation: simplify overlapping exposures by consolidating similar functions and consider introducing a non‑equity sleeve to better match a balanced profile.

Growth Info

Using the reported CAGR of 16.02% a hypothetical €10,000 invested and held for five years would have grown roughly to about €21,000 illustrating strong past growth, while the max drawdown of −31.66% shows substantial downside during stress. CAGR (Compound Annual Growth Rate) is the average annual growth rate of an investment over time like measuring average speed on a trip. Historic performance shows high returns but also sizable volatility; recommendation: plan for similar swings, use position sizing and rebalancing, and avoid assuming past CAGR guarantees future results.

Projection Info

The Monte Carlo simulation approach generates many possible future paths by sampling returns based on historical patterns to show a range of outcomes rather than a single forecast. With 1,000 simulations and a median outcome that implies large growth and 996 positive runs, results look favorable but depend heavily on the historical return assumptions and correlations used. Simulations are useful for planning because they show variability, but they are not predictions; tail events and regime changes can break assumptions. Recommendation: use these projections as scenario guidance and stress test the plan with conservative tails and shorter horizon scenarios.

Asset classes Info

  • Stocks
    100%

The portfolio is 100% equities with effectively no fixed income cash or alternatives, which amplifies both upside and downside. Asset class diversification usually smooths returns because bonds and alternatives often behave differently than stocks in downturns. For someone with a balanced risk classification this all‑equity tilt departs from typical balanced norms that include bonds for capital preservation. Recommendation: evaluate adding a fixed income allocation or defensive assets sized to the target risk profile to reduce volatility and improve resilience during market stress while keeping equity exposure for long‑term growth.

Sectors Info

  • Technology
    50%
  • Financials
    9%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Telecommunications
    7%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Basic Materials
    2%
  • Utilities
    2%
  • Energy
    2%
  • Real Estate
    1%

Sector exposure is highly skewed with Technology ≈50% and the remainder spread across nine sectors at much smaller weights. Sector concentration increases sensitivity to sector specific shocks like regulatory changes or interest rate moves; for example, tech‑heavy portfolios may face larger drawdowns when rates rise. Some exposure across Financials Industrials Healthcare and Consumer provides partial balance but doesn’t offset the tech tilt. Recommendation: assess whether the technology weight is intentional; if not, reduce duplicative tech exposure or add sectors with low correlation to technology to improve cyclical balance and risk dispersion.

Regions Info

  • North America
    69%
  • Europe Developed
    28%
  • Japan
    1%

Geographic exposure is dominated by North America (~69%) with Europe developed at ~28% and very limited Japan exposure. This heavy US bias concentrates country and currency risk and reduces diversification benefits from other regions and emerging markets. Geographic diversification can smooth returns because different economies and policy regimes often perform asynchronously. Recommendation: if the objective is broader diversification, consider modest allocations to Asia developed and emerging markets or regional funds that complement existing exposures to reduce dependence on North American market leadership.

Market capitalization Info

  • Mega-cap
    56%
  • Large-cap
    32%
  • Mid-cap
    11%

Market cap split favors large caps with Mega ~56% Big ~32% and Mid ~11% while Small caps are essentially absent. Large caps generally provide greater liquidity and stability while mid and small caps can add growth and diversification but also more volatility. The current mix tilts toward stability and concentration in the largest companies which are also the names held across multiple ETFs. Recommendation: if seeking incremental return and diversification, consider a controlled exposure to mid or small caps, or use funds that provide broad market cap coverage to capture different return drivers.

Redundant positions Info

  • Amundi Nasdaq-100 II UCITS ETF Acc EUR
    iShares S&P 500 USD Information Technology Sector UCITS
    High correlation

There is a highly correlated group identified between the Nasdaq‑100 ETF and the US information technology sector ETF which indicates substantial overlap in holdings and return behavior. Correlation measures how assets move together where 1 means they move in lockstep and 0 means no relationship; in stress events correlations can rise and reduce diversification benefits. High correlation limits the true risk reduction that multiple funds are supposed to deliver. Recommendation: remove or reduce one of the overlapping positions or replace it with a lower correlation asset to increase effective diversification and meaningful risk reduction.

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.

Portfolio optimization through the Efficient Frontier can identify the best risk‑return mix among the current assets but only by reallocating between those same ETFs; the Efficient Frontier is a way to find portfolios that maximize expected return for a given level of risk or minimize risk for a given return. Optimization assumes stable return distributions and correlations which may not hold in future regimes. Recommendation: before running an optimization remove overlapping high‑correlation positions, then use optimization to find an efficient allocation that matches the target risk score while remembering efficiency measures trade‑off between risk and return not absolute diversification.

Ongoing product costs Info

  • iShares Core MSCI Europe UCITS ETF EUR (Acc) 0.20%
  • iShares Core MSCI World UCITS ETF USD (Acc) EUR 0.20%
  • Amundi Nasdaq-100 II UCITS ETF Acc EUR 0.30%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Weighted costs total (per year) 0.21%

Total expense ratio (TER) is low at around 0.21% which is a clear strength because lower ongoing costs compound into significantly higher long‑term returns. TER is the annual fee charged by funds and acts like a drag on performance similar to fuel consumption lowering effective mileage on a trip. Low costs align well with passive ETF strategies and are a positive alignment with best practices. Recommendation: maintain focus on low TER products, minimize trading fees, and be mindful of tax efficiency since trading and distributions can erode after‑tax returns.

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