A growth-focused portfolio with high tech exposure and limited geographic diversification

Report created on Feb 20, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed entirely of equity ETFs, with a significant allocation to the iShares NASDAQ 100 UCITS ETF (40%), iShares MSCI World SRI UCITS ETF (30%), and VanEck Semiconductor UCITS ETF (30%). Compared to typical benchmarks, this portfolio is heavily weighted towards technology and growth sectors, while lacking in bonds or other asset classes. This composition suggests a strong focus on capital appreciation, but it may expose the portfolio to higher volatility. To mitigate risk, consider diversifying into other asset classes such as bonds, which can provide stability during market downturns.

Growth Info

Historically, this portfolio has performed impressively, with a compound annual growth rate (CAGR) of 19.69%. This indicates strong growth over time, significantly outperforming many traditional benchmarks. However, the maximum drawdown of -30.66% highlights the potential risk during market downturns. While past performance is no guarantee of future results, this history suggests the portfolio can deliver substantial returns, albeit with considerable volatility. Investors should be prepared for potential fluctuations and consider their risk tolerance when evaluating this performance.

Projection Info

Forward projections using Monte Carlo simulations estimate a wide range of potential outcomes, with the 50th percentile showing a 1,139.3% return. This method uses historical data to simulate future performance but should be viewed with caution, as it cannot account for unforeseen market changes. The high number of simulations with positive returns (996 out of 1,000) suggests a favorable outlook. However, investors should remain cautious and regularly review their portfolio to ensure alignment with their risk tolerance and investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, which can drive high returns but also increase risk due to lack of diversification. A common benchmark would include a mix of asset classes like bonds or real estate to balance risk and return. This 100% equity allocation aligns with a growth-focused strategy, but adding non-correlated assets could help reduce volatility and provide more stable returns. Consider introducing other asset classes to enhance diversification and potentially improve the risk-return profile.

Sectors Info

  • Technology
    61%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Health Care
    5%
  • Financials
    4%
  • Industrials
    4%
  • Consumer Staples
    4%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is heavily concentrated in technology (61%), with additional exposure to consumer cyclicals and communication services. This concentration can lead to higher volatility, especially during periods of tech sector underperformance. Compared to common benchmarks, this sector allocation is quite aggressive. While tech has historically been a strong performer, consider diversifying into other sectors like healthcare or industrials to reduce potential risk and enhance stability.

Regions Info

  • North America
    92%
  • Europe Developed
    5%
  • Asia Developed
    3%

Geographically, the portfolio is overwhelmingly focused on North America (92%), with minimal exposure to Europe and Asia. This concentration could limit diversification benefits and increase vulnerability to regional economic downturns. Compared to global benchmarks, this allocation is heavily skewed. To enhance geographic diversification, consider increasing exposure to emerging markets or other developed regions, which could provide growth opportunities and reduce reliance on a single region's performance.

Market capitalization Info

  • Large-cap
    44%
  • Mega-cap
    41%
  • Mid-cap
    14%

The portfolio's market capitalization is skewed towards large-cap companies, with 44% in big and 41% in mega-cap stocks. This focus on larger companies can provide stability and lower volatility compared to small-cap stocks. However, it may also limit growth potential. To enhance diversification and potentially capture higher returns, consider incorporating mid- or small-cap stocks, which can offer unique growth opportunities and reduce reliance on large-cap performance.

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's risk-return profile could be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio for a given set of assets. This involves adjusting the allocation between existing holdings to achieve the most efficient balance. While the current allocation is growth-oriented, exploring small adjustments could enhance returns without significantly increasing risk. Regularly revisiting this optimization can help maintain alignment with investment goals.

Ongoing product costs Info

  • iShares MSCI World SRI UCITS ETF EUR (Acc) 0.23%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • VanEck Semiconductor UCITS ETF 0.35%
  • Weighted costs total (per year) 0.32%

The portfolio's total expense ratio (TER) is 0.32%, which is relatively low and supports better long-term performance by minimizing costs. Compared to industry averages, these fees are quite competitive, indicating efficient cost management. Keeping costs low is crucial for maximizing net returns over time. While the current cost structure is favorable, periodically reviewing and comparing fees can ensure continued cost-effectiveness and prevent unnecessary expenses.

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