A balanced portfolio with strong North American exposure and moderate sector diversification

Report created on Apr 1, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio consists entirely of ETFs, with a strong focus on developed markets. Notably, 30% is invested in the Xtrackers - Stoxx Europe 600 and another 30% in the iShares Core S&P 500, providing a solid foundation in European and American equities. This structure aligns well with global benchmarks for balanced portfolios, offering exposure to both regional economic strengths. However, the absence of bonds or alternative asset classes could limit risk management strategies during market downturns. Consider introducing a small percentage of fixed-income assets to enhance stability without significantly altering the portfolio's growth potential.

Growth Info

Historically, the portfolio has delivered a compound annual growth rate (CAGR) of 12.88%, which is impressive. This performance is largely driven by its substantial exposure to North American equities, which have experienced significant growth over the past decade. The maximum drawdown of -32.68% indicates vulnerability during market downturns, a common trait in equity-heavy portfolios. While past performance does not guarantee future results, maintaining a diversified asset base can help mitigate similar risks going forward. Regular performance reviews against a relevant benchmark can ensure alignment with your investment goals.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data, the portfolio shows a broad range of potential returns. The 50th percentile suggests a 379.2% increase, while even the 5th percentile maintains a positive return. This indicates a strong likelihood of positive outcomes, although simulations are based on past data and cannot predict future market conditions accurately. To manage expectations, consider setting realistic return goals and regularly adjusting your strategy to account for changing market dynamics and personal circumstances.

Asset classes Info

  • Stocks
    100%

The portfolio is composed entirely of equities, which can drive significant growth but also increase volatility. While this can be advantageous for achieving higher returns, it may not suit investors with lower risk tolerance. A more balanced allocation, including fixed-income securities or other asset classes, could provide a buffer against market fluctuations. Comparing your asset class distribution to a benchmark can help determine if your current allocation aligns with your risk profile and investment objectives.

Sectors Info

  • Technology
    22%
  • Financials
    21%
  • Health Care
    19%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

With a 22% allocation to technology and 21% to financial services, the portfolio is somewhat concentrated in these sectors. This can lead to higher volatility, especially if these sectors experience downturns. The portfolio's sectoral composition aligns with current market trends but could benefit from increased diversification to reduce sector-specific risks. Expanding exposure to sectors like consumer cyclicals or utilities may enhance stability and offer protection against sector-specific downturns.

Regions Info

  • North America
    57%
  • Europe Developed
    42%

The portfolio's geographic allocation leans heavily towards North America, comprising 57% of the holdings, with 42% in developed Europe. This provides solid exposure to stable economies but limits diversification across other regions. The absence of emerging markets could mean missing out on potential growth opportunities. Consider incrementally adding exposure to regions like Asia or Latin America to enhance diversification and capture growth in emerging economies.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    36%
  • Mid-cap
    15%

The portfolio predominantly invests in large-cap stocks, with 48% in mega caps and 36% in big caps. This focus provides stability and reduced volatility, as these companies are generally more established and resilient. However, the absence of small-cap stocks may limit growth potential. Introducing a small allocation to mid- or small-cap stocks could enhance diversification and offer opportunities for higher returns, albeit with increased 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's current allocation can be optimized using the Efficient Frontier, a concept that helps identify the best possible risk-return ratio. By adjusting the weightings of existing assets, you can potentially enhance returns or reduce risk. However, this optimization is based solely on historical data and current assets, so it should be revisited regularly. Consider consulting with a financial advisor to explore optimization strategies that align with your risk tolerance and investment goals.

Ongoing product costs Info

  • Xtrackers - Stoxx Europe 600 UCITS ETF 0.25%
  • SPDR® MSCI Europe Financials UCITS ETF 0.18%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • Xtrackers MSCI World Health Care UCITS ETF 1C 0.25%
  • Weighted costs total (per year) 0.23%

The portfolio's total expense ratio (TER) is 0.23%, which is competitive and supports long-term performance. Lower costs mean more of your returns are retained, compounding over time. This efficient cost structure is a positive aspect of the portfolio. Regularly reviewing and comparing costs with similar portfolios can ensure that your investments remain cost-effective. Avoid complacency by periodically evaluating alternatives that may offer even lower fees.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey