Balanced Risk Portfolio with Broad Diversification and Strong Geographic and Sector Spread

Report created on Nov 24, 2024

Risk profile Info

4/7
Balanced
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Diversification profile Info

4/5
Broadly Diversified
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Positions

The portfolio is composed entirely of the Vanguard FTSE All-World UCITS ETF USD Accumulation, which provides broad exposure across global markets. This ETF covers a wide range of sectors and geographies, offering a balanced risk profile. The single ETF structure simplifies management while ensuring diversification. This setup is ideal for those seeking a hands-off approach to investing. By relying on a single fund, the portfolio benefits from professional management and automatic rebalancing. To enhance diversification, consider periodically reviewing the ETF's composition to ensure it aligns with personal investment goals.

Growth Info

Historically, the portfolio has shown impressive growth with a compound annual growth rate (CAGR) of 13.11%. This indicates strong performance over time, although the maximum drawdown of -33.45% highlights potential volatility. The 21 days that account for 90% of returns suggest that market timing could significantly impact performance. Understanding past performance helps set realistic expectations for future returns. While past performance is not indicative of future results, maintaining a long-term perspective and staying invested during market fluctuations can help achieve desired outcomes.

Projection Info

Using a Monte Carlo simulation, which runs thousands of scenarios to predict future performance, the portfolio shows potential for substantial growth. With a hypothetical initial investment, the simulation's median outcome is a 437.58% increase, with a 67th percentile projection of 607.08%. The simulation suggests a high probability of positive returns, as 994 out of 1,000 simulations resulted in gains. This analysis provides a range of possible outcomes, helping investors understand potential risks and rewards. Regularly reviewing projections can help ensure the portfolio remains aligned with personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio's asset class allocation is heavily weighted towards stocks, with 99.94% in equities. This high equity exposure reflects a growth-oriented strategy, which can lead to higher returns but also increased volatility. The minimal allocation to other asset classes like cash and unclassified assets suggests a focus on long-term capital appreciation. To manage risk, investors might consider diversifying into other asset classes, such as bonds, to balance the portfolio's risk and return profile. Regularly reviewing asset class allocations can help maintain alignment with changing risk tolerance and financial goals.

Sectors Info

  • Technology
    25%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio is diversified across multiple sectors, with technology, financial services, and healthcare leading the way. This sector allocation provides exposure to various economic segments, reducing reliance on any single industry. The broad sector spread helps cushion against sector-specific downturns while capturing growth opportunities across different areas. Regularly reviewing sector allocations ensures alignment with market trends and personal investment objectives. By maintaining a diversified sector approach, the portfolio can potentially benefit from growth in various industries while managing sector-specific risks.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America, followed by Europe Developed and Asia Emerging. This geographic spread provides exposure to different economic regions, enhancing diversification. The allocation reflects a balanced approach, capturing growth in developed markets while participating in emerging market opportunities. Regularly reviewing geographic allocations ensures the portfolio remains aligned with global economic trends and personal investment goals. By maintaining a diversified geographic approach, the portfolio can benefit from growth in various regions while managing country-specific risks.

Ongoing product costs Info

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

The portfolio's costs are relatively low, with a Total Expense Ratio (TER) of 0.22% for the Vanguard FTSE All-World UCITS ETF USD Accumulation. Low costs are crucial for long-term investment success, as they directly impact net returns. Keeping costs low allows more of the portfolio's gains to compound over time. Understanding the cost structure helps manage expenses and optimize returns. Regularly reviewing and comparing costs ensures the portfolio remains cost-efficient. By focusing on low-cost investments, the portfolio can maximize returns while minimizing the impact of fees.

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