A balanced global equity portfolio with a strategic emphasis on factor and regional diversification

Report created on Aug 25, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio predominantly comprises global equity ETFs, with a 70% allocation to a broad market ETF and the remaining 30% distributed among momentum, value, emerging markets, and small-cap ETFs. This composition reflects a balanced approach, blending broad market exposure with strategic bets on specific factors and regions. The portfolio's alignment with a balanced risk profile, indicated by a risk score of 4 out of 7, suggests a moderate risk tolerance, aiming for growth while managing volatility through diversification.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.07%, with a maximum drawdown of -25.56%. These figures highlight the portfolio's ability to generate strong returns over time, albeit with periods of significant volatility. The days contributing to 90% of the returns being concentrated in just 28.0 days underscores the impact of short-term, high-gain periods on overall performance. This historical performance, while impressive, should be contextualized with the understanding that past results do not guarantee future outcomes.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes for this portfolio. With key percentiles at 21.8% (5th), 273.9% (50th), and 390.5% (67th), and 980 out of 1,000 simulations yielding positive returns, the projections indicate a high likelihood of future growth. However, the significant spread between percentiles underscores the uncertainty inherent in these projections, emphasizing the need for ongoing risk management.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, offering high growth potential but also higher volatility compared to portfolios with multi-asset class diversification. This singular focus on equities is suitable for investors with a moderate risk tolerance and a long-term investment horizon. However, incorporating other asset classes, such as fixed income or real estate, could provide additional diversification benefits and reduce overall portfolio volatility.

Sectors Info

  • Technology
    24%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is well-diversified, with technology (24%) and financial services (17%) being the most significant exposures, followed by industrials and consumer cyclicals. This sector distribution aligns with a growth-oriented strategy but may also expose the portfolio to sector-specific risks, such as regulatory changes in technology or economic cycles affecting financial services. Balancing sector exposures can mitigate these risks while still capturing growth opportunities.

Regions Info

  • North America
    66%
  • Europe Developed
    17%
  • Japan
    7%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (66%), with meaningful allocations to developed Europe and Japan. Emerging markets and other developed Asian economies represent smaller portions. This geographic distribution suggests a focus on established markets with a side allocation to emerging markets for growth. Increasing exposure to underrepresented regions could enhance diversification and capture growth in faster-growing economies.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    35%
  • Mid-cap
    17%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization exposure is concentrated in mega (44%) and big (35%) cap stocks, with lesser allocations to medium, small, and micro caps. This bias towards larger companies may contribute to stability and lower volatility but can also limit potential upside from smaller, faster-growing companies. A more balanced market cap distribution could enhance growth prospects while maintaining a core of stability.

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 risk-return profile appears well-calibrated for a balanced investor, but there's always room for optimization. Utilizing the Efficient Frontier concept could identify adjustments in asset allocation to achieve the best possible risk-return ratio. However, this optimization should consider the investor's risk tolerance, investment horizon, and financial goals, as 'efficiency' in mathematical terms may not align perfectly with personal objectives.

Ongoing product costs Info

  • iShares Edge MSCI World Momentum Factor UCITS ETF 0.30%
  • iShares MSCI World Value Factor UCITS 0.30%
  • iShares MSCI EM UCITS ETF USD (Acc) 0.18%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Weighted costs total (per year) 0.22%

With a Total Expense Ratio (TER) averaging 0.22%, the portfolio's costs are relatively low, which is beneficial for long-term growth. Lower costs mean more of the portfolio's returns are retained by the investor. Periodically reviewing investment costs and considering even lower-cost alternatives (where appropriate) can further enhance net returns.

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