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A broadly diversified and cautious portfolio with a tech focus and solid dividend exposure

Report created on Dec 26, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of five ETFs with a significant focus on equities, particularly in the technology and dividend sectors. This allocation provides a balanced approach, combining growth potential with income generation. The bond allocation offers stability, aligning with a cautious risk profile. Compared to typical benchmarks, this portfolio leans towards equities, which may increase potential returns but also volatility. Consider whether this balance aligns with your long-term goals and risk tolerance. A slight increase in bond allocation could further stabilize the portfolio if desired.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 8.87%, which is robust for a cautious profile. The maximum drawdown of -15.62% indicates resilience during market downturns. While past performance is no guarantee of future results, these figures suggest a well-managed risk-reward balance. Comparing to benchmarks, this performance is commendable, especially given the conservative risk score. Maintaining the current asset mix could continue to yield similar results, though periodic reviews are advisable to ensure alignment with changing market conditions.

Projection Info

Using Monte Carlo simulations, which predict future outcomes based on historical data, the portfolio shows a wide range of potential returns. The median outcome suggests a 53.2% growth, while the worst-case scenario indicates a potential 48.11% loss. Although 731 out of 1,000 simulations resulted in positive returns, it's crucial to remember that these are probabilistic models and not certainties. Regularly reassessing the portfolio's alignment with your risk tolerance and goals is recommended, as market conditions and personal circumstances evolve.

Asset classes Info

  • Stocks
    80%
  • Bonds
    19%

The portfolio's allocation across asset classes is predominantly in stocks (80%) with a smaller portion in bonds (19%). This distribution is typical for investors seeking growth while maintaining some level of stability. Compared to standard benchmarks, the stock allocation is slightly higher, which could enhance returns but also increase volatility. For those seeking a more conservative approach, consider increasing bond exposure. This shift could reduce potential volatility and align more closely with a cautious risk profile.

Sectors Info

  • Technology
    34%
  • Financials
    15%
  • Health Care
    6%
  • Consumer Discretionary
    5%
  • Industrials
    4%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Telecommunications
    3%
  • Real Estate
    2%
  • Consumer Staples
    2%

The portfolio is heavily weighted towards the technology sector, comprising 33.57% of the allocation. While this can drive growth, it also introduces sector-specific risks, especially during periods of regulatory changes or market corrections affecting tech stocks. Other sectors like financial services and healthcare provide some balance. To mitigate risks, consider diversifying further into underrepresented sectors such as consumer defensive or utilities, which can offer stability during economic downturns.

Regions Info

  • North America
    54%
  • Europe Developed
    12%
  • Asia Developed
    7%
  • Australasia
    4%
  • Japan
    1%

Geographically, the portfolio is heavily invested in North America, representing over 54% of the allocation. While this region offers robust growth opportunities, it also exposes the portfolio to regional economic fluctuations. The limited exposure to emerging markets could mean missed opportunities for growth and diversification. Consider increasing allocations in Europe or Asia to balance geographic risk and tap into diverse economic cycles. This adjustment can enhance global diversification and potentially improve returns.

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.

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The portfolio's risk vs. return profile can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. This involves adjusting current asset allocations to achieve a balance that maximizes returns for a given level of risk. While the current allocation is well-aligned with a cautious risk profile, exploring optimization opportunities can enhance efficiency. Regularly assess whether the portfolio's risk-return ratio aligns with your investment goals and risk tolerance.

Ongoing product costs Info

  • iShares MSCI World SRI UCITS ETF EUR (Acc) 0.23%
  • iShares Core Corporate Bond UCITS 0.20%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • WisdomTree BioRevolution UCITS ETF - USD Acc 0.45%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is impressively low and supports better long-term performance by minimizing costs. Low costs are crucial for maximizing net returns, especially over extended investment periods. Regularly reviewing and comparing current expenses with alternative investments ensures cost-effectiveness. Consider whether lower-cost ETFs or funds could replace higher-fee assets without compromising on quality or performance.

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