A diversified cautious portfolio with global exposure and a focus on technology and gold

Report created on Mar 3, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of a mix of equity and fixed income assets, with a significant 65% allocation to the SPDR MSCI ACWI UCITS ETF. This ETF provides broad global equity exposure, aligning with a diversified investment strategy. The inclusion of bond and gold ETFs further diversifies the portfolio, offering a balance between growth and stability. Compared to typical cautious portfolios, this one leans more towards equities, which could enhance returns but also increase volatility. Consider reviewing the asset mix periodically to ensure it aligns with your risk tolerance and market conditions.

Growth Info

Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 10.48%. This indicates a strong growth trajectory, outperforming many cautious benchmarks. However, it has also experienced a maximum drawdown of -13.34%, highlighting potential volatility. The performance is driven by the equity-heavy allocation, which has benefited from favorable market conditions. It's important to remember that past performance doesn't guarantee future results. Regularly reviewing historical performance can help maintain realistic expectations and adjust strategies as necessary.

Projection Info

Using Monte Carlo simulations, which project potential future outcomes based on historical data, the portfolio shows promising results. With an annualized return of 12.05% across simulations, it suggests potential for robust growth. However, these projections rely on past data and market conditions can change. The simulations reveal a wide range of possible outcomes, emphasizing the inherent uncertainty in investing. While the median projection is positive, it's wise to prepare for various scenarios by maintaining a diversified approach and regularly reassessing your risk tolerance.

Asset classes Info

  • Stocks
    70%
  • Bonds
    13%
  • Other
    12%

The portfolio's asset class allocation includes 70% in stocks, 13% in bonds, and 12% in gold, which provides a balanced approach to diversification. This mix is typical for a cautious investor, offering growth potential while mitigating risk through bonds and gold. Compared to benchmarks, the allocation is slightly more aggressive due to the higher equity exposure. This strategy can enhance returns but may also increase volatility. Regularly reviewing the asset class distribution can help ensure it aligns with your investment goals and risk tolerance.

Sectors Info

  • Technology
    23%
  • Financials
    11%
  • Consumer Discretionary
    7%
  • Health Care
    6%
  • Industrials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

The sector allocation is notably tech-heavy, with 23% in technology, which could lead to higher volatility during market downturns or interest rate hikes. The remaining allocation is spread across financial services, consumer cyclicals, and healthcare, among others, providing diversification. This sector mix aligns with global benchmarks, offering exposure to growth sectors while maintaining balance. Consider monitoring sector trends and adjusting allocations if necessary to manage risk and capitalize on emerging opportunities.

Regions Info

  • North America
    49%
  • Europe Developed
    10%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, comprising 49% of the allocation. This exposure aligns with global benchmarks but may limit diversification benefits. Europe and Asia provide additional diversification, albeit at lower levels. The lack of exposure to emerging markets could be a missed opportunity for growth. Consider increasing geographic diversification to include more emerging markets, which can enhance returns and reduce reliance on any single region's performance.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    25%
  • No data
    12%
  • Mid-cap
    11%

The portfolio's market capitalization allocation is skewed towards mega and big-cap stocks, making up 59% of the total. This focus on larger companies offers stability and reduced volatility compared to small-cap stocks. However, it may limit growth potential. The absence of small and micro-cap stocks could be an area for improvement. Introducing a small percentage of these stocks can provide additional growth opportunities and enhance diversification, though it may increase risk.

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 can potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio by adjusting asset allocations. This concept focuses on maximizing returns for a given level of risk. By analyzing the current assets, you can identify opportunities to enhance the portfolio's efficiency. Regularly revisiting asset allocations and considering rebalancing can help maintain an optimal risk-return balance, ensuring the portfolio continues to meet your investment objectives.

Dividends Info

  • iShares Global Govt Bond UCITS ETF 2.70%
  • Weighted yield (per year) 0.35%

The portfolio's overall dividend yield is modest at 0.35%, with the iShares Global Govt Bond UCITS ETF contributing the most at 2.70%. While dividends can provide a steady income stream, this portfolio focuses more on growth through capital appreciation. For cautious investors seeking income, increasing exposure to higher-yielding assets could be beneficial. However, it's important to balance income needs with growth potential and risk tolerance, ensuring the portfolio remains aligned with your overall investment strategy.

Ongoing product costs Info

  • SSgA SPDR ETFs Europe I Public Limited Company - SPDR MSCI ACWI UCITS ETF 0.45%
  • iShares Global Govt Bond UCITS ETF 0.25%
  • L&G Cyber Security UCITS ETF GBP 0.69%
  • iShares Physical Gold ETC 0.25%
  • VanEck Semiconductor UCITS ETF 0.35%
  • Weighted costs total (per year) 0.41%

The portfolio's total expense ratio (TER) is 0.41%, which is relatively low and supports better long-term performance by minimizing costs. This is a positive aspect, as lower costs can enhance net returns over time. It's important to regularly review expense ratios to ensure they remain competitive. Consider exploring alternative investments with lower fees if costs increase, but ensure they align with your investment strategy and risk tolerance.

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