This portfolio has only about 6.1 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced and Broadly Diversified Portfolio with Moderate Costs and Strong Historical Performance

Report created on Jul 24, 2024

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 composed of three ETFs, with the Xtrackers MSCI World ESG UCITS ETF 1C making up 75%, the Xtrackers MSCI Emerging Markets UCITS ETF 1C at 20%, and the BNP Paribas Easy MSCI Europe Small Caps SRI S-Series PAB 5% Capped UCITS ETF Capitalisation at 5%. This composition shows a strong focus on global equities, including developed and emerging markets. A broadly diversified portfolio like this can help reduce risk by spreading investments across various markets and sectors. To further optimize diversification, consider periodically reviewing the allocation to ensure it aligns with long-term goals.

Growth Info

Historically, the portfolio has performed well with a Compound Annual Growth Rate (CAGR) of 11.61%. This indicates strong growth over time, though it has experienced a maximum drawdown of -33.15%, reflecting significant volatility during market downturns. Understanding these metrics is crucial because they provide insight into both the potential returns and risks of the portfolio. Maintaining a balanced approach can help manage these risks while still aiming for growth. Regularly reviewing performance can ensure the portfolio remains aligned with financial objectives.

Projection Info

Using a Monte Carlo simulation, which assesses the probability of different outcomes by running multiple scenarios, the portfolio shows an annualized return of 8.07%. The simulation, based on a hypothetical initial investment, projects a 5th percentile outcome of -25.81% and a 50th percentile outcome of 153.6%. This means there's a wide range of possible future returns, emphasizing the importance of being prepared for various market conditions. To manage expectations and plan for the future, it's beneficial to remain invested for the long term and continue monitoring performance.

Asset classes Info

  • Stocks
    80%
  • No data
    20%

The portfolio is primarily invested in stocks, making up approximately 79.83%, with a small allocation to cash and other assets. This high allocation to equities suggests a focus on growth, which can be beneficial for long-term investors. However, it also means the portfolio is subject to equity market volatility. To mitigate this, consider periodically reviewing the asset allocation and potentially adding more fixed-income securities to balance risk and return.

Sectors Info

  • Technology
    25%
  • No data
    20%
  • Financials
    13%
  • Health Care
    11%
  • Industrials
    8%
  • Telecommunications
    8%
  • Consumer Discretionary
    8%
  • Real Estate
    3%
  • Consumer Staples
    2%
  • Basic Materials
    2%
  • Utilities
    1%

The portfolio is diversified across several sectors, with the highest allocations in Technology (24.73%), Financial Services (12.72%), and Healthcare (10.89%). This sector diversification can help reduce the impact of sector-specific downturns. However, the heavy weighting in Technology may expose the portfolio to sector-specific risks. To maintain a balanced approach, it’s advisable to periodically review sector allocations and adjust as needed to ensure no single sector dominates the portfolio.

Regions Info

  • North America
    56%
  • No data
    20%
  • Europe Developed
    17%
  • Japan
    5%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America (56.28%) and Europe Developed (16.87%), with smaller allocations to other regions. This geographic diversification helps spread risk across different markets. However, the significant exposure to North America could mean higher sensitivity to market conditions in that region. To enhance geographic diversification, consider gradually increasing exposure to underrepresented regions while keeping an eye on global economic trends.

Ongoing product costs Info

  • BNP Paribas Easy MSCI Europe Small Caps SRI S-Series PAB 5% Capped UCITS ETF Capitalisation 0.26%
  • Xtrackers MSCI World ESG UCITS ETF 1C 0.25%
  • Weighted costs total (per year) 0.20%

The portfolio has relatively low costs, with the total expense ratio (TER) being 0.2%. Low costs are beneficial as they help maximize net returns. High fees can erode investment gains over time, so maintaining a low-cost portfolio is crucial. Regularly reviewing the expense ratios of the ETFs and considering lower-cost alternatives if available can help keep costs in check. Staying vigilant about fees ensures that more of the investment returns are retained.

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