A balanced portfolio with strong European and U.S. exposure and moderate emerging market presence

Report created on Feb 9, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is evenly split between Amundi Stoxx Europe 600 and iShares Core S&P 500 ETFs, each holding 40%, while iShares MSCI EM ETF makes up the remaining 20%. This structure offers a balanced exposure to developed markets, primarily Europe and the U.S., with a smaller allocation to emerging markets. Such a composition generally aligns with a balanced risk profile, providing stability from established markets and growth potential from emerging ones. To enhance diversification, consider adding other asset classes like bonds or real estate, which can help mitigate risk during market downturns.

Growth Info

Historically, the portfolio has delivered a compound annual growth rate (CAGR) of 11.29%, indicating robust growth over time. This performance is supported by strong returns from both the European and U.S. markets, which have been favorable in recent years. However, the maximum drawdown of -33.73% highlights potential volatility during market corrections. While past performance is not a guarantee of future results, it suggests the portfolio is capable of achieving substantial returns. To manage risk, consider strategies like regular rebalancing to maintain your desired asset allocation.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance shows a wide range of potential outcomes. The median scenario projects a 287.7% increase, while the 5th percentile suggests a more conservative 28.8% gain. These simulations indicate a high likelihood of positive returns, with 976 out of 1,000 simulations yielding gains. However, as with any model based on historical data, actual results may vary. It's crucial to periodically review and adjust the portfolio to align with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, which can offer significant growth potential but also introduces higher volatility. Compared to diversified portfolios that include bonds or other asset classes, this stock-only approach may experience larger swings in value. While equities are a key driver of long-term growth, incorporating bonds or alternative investments could provide a buffer against market fluctuations. This strategy might appeal to those with a higher risk tolerance, but for more conservative investors, a more diversified asset mix could be beneficial.

Sectors Info

  • Technology
    22%
  • Financials
    18%
  • Industrials
    12%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation reveals a concentration in technology (22%) and financial services (18%), with other sectors like industrials and healthcare also well-represented. This sector distribution is typical of global equity indices, providing exposure to both growth and defensive sectors. However, the tech-heavy tilt may result in increased volatility, especially during periods of rising interest rates. To mitigate sector-specific risks, consider periodically reviewing sector weights and diversifying further if necessary. This can help balance potential growth with stability across different economic cycles.

Regions Info

  • North America
    40%
  • Europe Developed
    40%
  • Asien Schwellenländer
    10%
  • Asien
    6%
  • Afrika/Mittlerer Osten
    2%
  • Latin America
    1%
  • Europa Schwellenländer
    1%

The portfolio's geographic allocation is evenly split between North America and Europe Developed, each representing 40%. This significant exposure to developed markets provides stability and aligns with global benchmarks. However, the emerging markets allocation is relatively modest at 20%, which may limit potential growth opportunities. While developed markets offer reliability, increasing exposure to emerging regions could enhance diversification and capture higher growth potential. Regularly reviewing geographic allocations can help ensure they align with long-term investment goals and risk tolerance.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    34%
  • Mid-cap
    15%

The portfolio is predominantly invested in mega-cap (48%) and large-cap (34%) stocks, with minimal exposure to mid-cap companies. This focus on larger companies offers stability and lower volatility, as these firms typically have established market positions. However, smaller companies, while riskier, often provide higher growth potential. To achieve a more balanced market cap distribution, consider incorporating mid- or small-cap stocks, which can enhance diversification and potentially boost returns. This approach may suit investors seeking a blend of stability and growth.

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 aligns well with the Efficient Frontier, suggesting an optimal risk-return balance given the assets involved. This means the portfolio is structured to achieve the best possible returns for its level of risk. While the asset mix is efficient, it's important to periodically reassess allocations, especially as market conditions change. Small adjustments based on performance or risk tolerance can help maintain efficiency. Regular reviews ensure the portfolio continues to meet your financial objectives while managing risk effectively.

Ongoing product costs Info

  • iShares MSCI EM UCITS ETF USD (Acc) 0.18%
  • Amundi Stoxx Europe 600 UCITS ETF C EUR 0.07%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is impressively low at 0.11%, indicating cost-efficiency. Such low costs can significantly enhance long-term returns, as fees compound over time. Compared to actively managed funds, this passive approach minimizes expenses, allowing more of your investment to grow. While the current cost structure is advantageous, it's important to periodically review fees to ensure they remain competitive. Staying vigilant about costs can help maximize the portfolio's performance over the long term.

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