Concentrated emerging markets tilt with strong value bias and extreme long term tail risk
Report created on Mar 28, 2026Risk 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
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IS iShares Core MSCI Emerging Markets IMI UCITS
IS3N - IE00BKM4GZ66 85.00% -
IU iShares MSCI World Small Cap UCITS ETF USD (Acc) EUR
IUSN - IE00BF4RFH31 10.00% -
3S Leverage Shares -3x Short Apple AAPL
3SAA - XS2472334742 5.00%
This portfolio is very focused, with around 95% in equities and three ETFs making up almost the entire allocation. The core is a broad emerging markets fund at 85%, complemented by a global small-cap ETF at 10%, plus a 5% position in a -3x short Apple product. That structure means most of the behaviour is driven by emerging markets, with small caps adding an extra layer of equity risk. The short Apple note is small in weight and has limited impact on overall risk, but it introduces complexity and path-dependence. A setup like this suits someone who consciously wants a strong emerging tilt rather than a classic global market mix.
Growth
Over the measured period, €1,000 grew to about €1,298, implying a 7.57% compound annual growth rate (CAGR). CAGR is the “average speed” of growth per year. This lagged both the US and global market benchmarks, which delivered around 11% per year over the same window. Interestingly, the portfolio’s maximum drawdown of -18.72% was smaller than the US market’s -23.32%, despite its heavy emerging tilt. That said, the history is short and includes unusual macro conditions, so it may not be representative. The key takeaway is that this mix has delivered solid, if benchmark-lagging, returns with reasonably contained historical drawdowns, but there’s no guarantee this pattern persists.
Asset classes
- Stocks 95%
- No data 5%
Asset class exposure is straightforward: 95% equities and 5% in “no data” instruments. Equities are growth engines but come with higher volatility and larger drawdowns than bonds or cash. For many balanced investors, a blended mix of shares and defensive assets is used to smooth the ride over market cycles. Here, the near-pure equity stance means portfolio value will likely swing more with market news, economic shifts, and sentiment. That’s fine if the time horizon is long and short-term fluctuations are acceptable. If stability, income, or capital preservation matter more, shifting a slice into safer assets is often how people align their holdings with sleep-at-night comfort levels.
Sectors
- Technology 28%
- Financials 18%
- Consumer Discretionary 10%
- Industrials 9%
- Basic Materials 7%
- Telecommunications 6%
- No data 5%
- Health Care 4%
- Energy 4%
- Consumer Staples 3%
- Real Estate 2%
- Utilities 2%
Sector exposure is heavily skewed toward technology at 28%, followed by financials at 18% and consumer-related areas and industrials making up much of the rest. This is typical for an emerging-market-heavy equity mix, where tech and financial champions dominate indexes. Tech-heavy allocations can shine during periods of innovation and low interest rates but tend to be more volatile when rates rise or regulatory pressures hit. The presence of a broad spread across other sectors is a positive, as it avoids being a single-sector bet. Still, the tilt means portfolio behaviour will be sensitive to cycles in semiconductors, digital platforms, and financial conditions across developing economies.
Regions
- Asia Developed 34%
- Asia Emerging 34%
- Africa/Middle East 8%
- North America 7%
- Latin America 7%
- No data 5%
- Europe Developed 2%
- Europe Emerging 2%
- Japan 1%
Geographically, the portfolio is very concentrated in Asia, with roughly two-thirds split between developed and emerging Asia, plus additional exposure to Africa/Middle East and Latin America. Only a small fraction is in Europe, Japan, and North America. Compared with global benchmarks, which are dominated by developed markets, this is a strong tilt away from traditional core markets and toward higher-growth but higher-risk regions. That can be attractive for long-term growth seekers but also means returns will depend heavily on political stability, currency moves, and structural reforms in those regions. Anyone using this as a main portfolio should be comfortable with outcomes diverging sharply from standard world indices.
Market capitalization
- Mega-cap 45%
- Large-cap 25%
- Mid-cap 15%
- Small-cap 8%
- No data 5%
- Micro-cap 1%
Market cap exposure is anchored in larger companies: around 45% mega-cap and 25% large-cap, with mid and small caps adding diversification at the edges. Larger firms often provide more stability, liquidity, and resilience in downturns, while smaller companies can offer higher growth potential but swing more. The 8% small-cap and 1% micro-cap exposure, boosted by the dedicated small-cap ETF, injects some higher-risk, higher-opportunity flavour without dominating the overall profile. This mix is broadly aligned with the way many global indices are structured, which is a positive sign for diversification by company size, even though the geographic and factor tilts are quite distinctive.
True holdings
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23 Taiwan Semiconductor Manufacturing Co. Ltd. 9.88%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
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00 Samsung Electronics Co Ltd 4.46%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
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07 Tencent Holdings Ltd 2.66%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
00 SK Hynix Inc 2.52%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
99 Alibaba Group Holding Ltd 1.97%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
HD HDFC Bank Limited 0.70%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
23 Hon Hai Precision Industry Co Ltd 0.62%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
24 MediaTek Inc 0.60%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
RE Reliance Industries Limited 0.58%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
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SN Sandisk Corp 0.08%
Part of fund(s):- iShares MSCI World Small Cap UCITS ETF USD (Acc) EUR
- Top 10 total 24.07%
Looking through the ETFs’ top holdings, there is meaningful concentration in a handful of large emerging market names. Taiwan Semiconductor alone accounts for nearly 10% of total exposure, with Samsung, Tencent, SK Hynix, and Alibaba also sizeable. Several of these appear across multiple underlying funds, which quietly increases their influence. Because only top-10 ETF holdings are captured, overlap is probably understated; real concentration is likely higher. This matters because company-specific or country-specific shocks to these giants can ripple strongly through the portfolio. When large single names dominate, even indirectly via funds, it’s worth deciding whether that concentration is intentional or an accidental by-product that might warrant trimming elsewhere.
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 notable tilts toward value and yield. Factor exposure describes how much a portfolio leans into traits like cheapness (value) or income (yield) that research links to returns. A high value score suggests holdings are priced lower relative to fundamentals, which can do well when markets rotate away from expensive growth names. The strong yield tilt implies above-average dividend or distribution potential, adding a defensive element in flat markets. Size exposure is low, meaning a bias toward larger companies. Momentum, quality, and low-volatility are close to neutral, so they behave similarly to the broad market. Overall, this setup may lag in high-flying growth phases but can be resilient when investors favour cheaper, cash-generative businesses.
Risk contribution
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iShares Core MSCI Emerging Markets IMI UCITS
Weight: 85.00% 91.8% -
iShares MSCI World Small Cap UCITS ETF USD (Acc) EUR
Weight: 10.00% 7.5% -
Leverage Shares -3x Short Apple AAPL
Weight: 5.00% 0.8%
Risk contribution highlights how much each holding drives overall volatility. Here, the core emerging markets ETF is 85% of the weight but contributes about 92% of total risk, slightly more than its size alone would suggest. The small-cap ETF is 10% of the portfolio and contributes roughly 7.5% of risk, making it relatively moderate in impact. Surprisingly, the -3x short Apple position is 5% by weight but contributes less than 1% of risk in this historical window. Risk contribution can shift quickly, especially for leveraged products. Periodic checks and rebalancing can help keep risk more aligned with intended allocations, rather than letting one position quietly dominate the portfolio’s ups and downs.
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 portfolio has a Sharpe ratio of 0.39, below the optimal portfolio’s 0.61 at similar risk. The Sharpe ratio is a simple way to judge how much return you’re getting per unit of volatility — higher is better. Being about 1.25 percentage points below the efficient frontier at the current risk level means that, using the same building blocks, a different weighting could target either higher expected return for similar risk or similar return with less volatility. The minimum-variance mix shows slightly lower risk but also lower return. Rebalancing toward the max-Sharpe or a same-risk optimized allocation could materially improve the efficiency of the portfolio without adding any new products.
Ongoing product costs
- iShares Core MSCI Emerging Markets IMI UCITS 0.18%
- iShares MSCI World Small Cap UCITS ETF USD (Acc) EUR 0.35%
- Weighted costs total (per year) 0.19%
Costs are a real strength here. The blended total expense ratio (TER) is about 0.19%, driven by a very low-cost emerging markets core ETF and a moderately priced small-cap fund. TER is the ongoing annual fee charged by a fund, and even small differences compound heavily over decades. Keeping costs this low is strongly aligned with best practices and supports better long-term outcomes, because more of the portfolio’s returns stay in your pocket. With such lean fees already in place, there’s limited room for further cost-cutting without sacrificing diversification or liquidity, so the focus can shift more toward risk/return structure and long-term strategy.
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