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A conservative portfolio with high diversification and a focus on global equities

Report created on Feb 23, 2025

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification
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Positions

The portfolio is composed of various ETFs, with a significant emphasis on equities, particularly through the Vanguard S&P 500 UCITS Acc, which makes up 30% of the portfolio. This allocation is complemented by a diverse mix of global equities, bonds, and a small portion in gold. Compared to a typical conservative portfolio, this one leans heavily on equities, which may increase potential returns but also introduces more risk. Balancing this with a 10% bond allocation helps mitigate volatility. The portfolio is well-structured for diversification, as it includes exposure to different asset types and geographic regions, potentially reducing risk.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 16.01%, indicating strong growth over time. This performance is particularly notable given the conservative risk classification, suggesting efficient asset selection. The maximum drawdown of -6.36% is relatively low, reflecting resilience during market downturns. While past performance is not an indicator of future results, the historical data suggests that the portfolio has been well-managed. Comparing this to a benchmark, such as a global equity index, can provide additional context on its performance.

Projection Info

Forward projections using Monte Carlo simulations indicate a wide range of potential outcomes, with a median expected return of 583.3%. This method uses historical data to simulate various future scenarios, providing a probabilistic view of potential returns. While the simulations show a high probability of positive returns, it's important to remember that they rely on past data and assumptions, which may not hold true in the future. This highlights the importance of regular portfolio reviews to ensure alignment with evolving market conditions and personal goals.

Asset classes Info

  • Stocks
    82%
  • Bonds
    10%

The portfolio's asset allocation is heavily skewed towards stocks, comprising 82% of the total. This allocation may enhance growth potential but also increases exposure to market volatility. The inclusion of bonds at 10% provides a buffer against equity market fluctuations, aligning with the portfolio's conservative risk profile. To ensure optimal diversification, it may be beneficial to periodically review the balance between stocks and bonds, especially in response to changing market conditions and personal risk tolerance.

Sectors Info

  • Technology
    21%
  • Financials
    12%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Telecommunications
    6%
  • Real Estate
    6%
  • Consumer Staples
    4%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%

Sector allocation is diverse, with a notable 21% in technology, followed by financial services and industrials. This sectoral mix aligns well with global benchmarks, providing a balanced exposure across various economic segments. However, the concentration in technology could lead to increased volatility, especially during periods of regulatory changes or interest rate fluctuations. Regularly reviewing sector allocations can help maintain balance and capitalize on emerging trends while managing sector-specific risks.

Regions Info

  • North America
    55%
  • Europe Developed
    13%
  • Asia Emerging
    6%
  • Asia Developed
    3%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%

Geographic exposure is predominantly in North America, accounting for 55% of the portfolio. This allocation reflects a strong bias towards developed markets, particularly the U.S., which has historically provided stability and growth. The remaining geographic exposure is spread across Europe, Asia, and other regions, offering some diversification benefits. To further enhance geographic diversification, consider increasing allocations to emerging markets, which may offer higher growth potential but also come with increased risk.

Market capitalization Info

  • Large-cap
    27%
  • Mega-cap
    26%
  • Mid-cap
    22%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization distribution is well-balanced, with a mix of large-cap (mega and big) and mid-cap stocks. This allocation provides stability through large, established companies while offering growth opportunities via mid-cap stocks. The small and micro-cap exposure is minimal, which aligns with the conservative risk profile. Maintaining this balance can help manage risk while still capturing growth potential from smaller, more dynamic companies.

Redundant positions Info

  • Vanguard S&P 500 UCITS Acc
    iShares Core MSCI World UCITS ETF USD (Acc)
    High correlation

The portfolio contains highly correlated assets, particularly between the Vanguard S&P 500 UCITS Acc and iShares Core MSCI World UCITS ETF USD (Acc). High correlation means these assets tend to move together, which can limit diversification benefits. Reducing overlap by selecting less correlated assets can enhance diversification, potentially improving risk-adjusted returns. Consider evaluating the necessity of holding both ETFs, as they may not provide distinct diversification advantages.

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.

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The portfolio's current allocation can potentially be optimized using the Efficient Frontier, a concept that seeks the best possible risk-return ratio. However, before optimizing, focus on reducing overlapping assets that offer no additional diversification benefits. The Efficient Frontier helps identify allocations that maximize returns for a given level of risk, but it doesn't account for individual preferences or external factors. Regular reviews and adjustments can ensure the portfolio remains aligned with personal goals and market conditions.

Ongoing product costs Info

  • iShares Core Global Aggregate Bond UCITS ETF 0.10%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares MSCI EMU Mid Cap UCITS 0.49%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • iShares Edge MSCI World Minimum Volatility ESG UCITS ETF USD (Acc) 0.30%
  • Global X Data Center REITS & Digital Infrastructure UCITS ETF USD Acc 0.50%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.18%

The portfolio's total expense ratio (TER) of 0.18% is impressively low, supporting better long-term returns by minimizing costs. Lower costs mean more of your returns stay in your pocket, enhancing compounding over time. The Vanguard S&P 500 UCITS Acc, with a TER of 0.07%, is particularly cost-effective. Regularly reviewing and optimizing for low-cost investments can further improve net returns, making cost management a key strategy in maintaining portfolio efficiency.

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