A cautious portfolio with strong diversification and a balanced risk-return profile

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Cautious Investors

This portfolio suits a cautious investor seeking moderate growth with a balanced risk profile. It prioritizes diversification across asset classes, sectors, and geographies, making it ideal for those with a medium to long-term investment horizon. The portfolio's structure supports steady returns while managing volatility, aligning with investors who value stability and gradual wealth accumulation. Its moderate risk score suggests a preference for safety over aggressive growth, appealing to individuals focused on preserving capital while participating in market gains.

Positions

  • iShares Core MSCI World UCITS ETF USD (Acc)
    EUNL - IE00B4L5Y983
    60.00%
  • iShares Global Aggregate Bond UCITS Dist
    EUNU - IE00B3F81409
    20.00%
  • iShares Core MSCI Emerging Markets IMI UCITS
    IS3N - IE00BKM4GZ66
    20.00%

The portfolio comprises 60% iShares Core MSCI World UCITS ETF, 20% iShares Global Aggregate Bond UCITS, and 20% iShares Core MSCI Emerging Markets IMI UCITS. This composition offers exposure to both equities and bonds, aligning with a balanced investment strategy. Compared to common benchmarks, this portfolio leans towards equities, which may enhance growth potential. However, the bond allocation provides a cushion against market volatility. This allocation is well-balanced, offering both growth and stability. Consider whether this mix aligns with your long-term goals and risk tolerance, and adjust if necessary to maintain a balance between growth and protection.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 8.94%, which is impressive for a cautious profile. The maximum drawdown of -27.95% indicates moderate risk during downturns. Compared to similar portfolios, this performance is robust, suggesting effective diversification and asset selection. However, past performance doesn't guarantee future results. It's crucial to maintain realistic expectations and regularly review performance against personal objectives. Consider periodic rebalancing to ensure alignment with desired risk levels and to capitalize on market opportunities.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a 50th percentile end value of 110.48% and a 67th percentile of 168.6%. With 916 out of 1,000 simulations showing positive returns, the portfolio is likely to perform well under various market conditions. However, the 5th percentile indicates a potential downside of -13.7%. Remember, simulations are based on historical data and can't predict future market conditions with certainty. Use these projections as a guide to assess potential outcomes and adjust your strategy as needed.

Asset classes

  • Stocks
    80%
  • Bonds
    20%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio's allocation includes 79.72% in stocks and 19.74% in bonds, with minimal cash holdings. This blend is typical for a cautious investor seeking moderate growth while managing risk. Compared to benchmarks, the allocation is slightly equity-heavy, which may enhance returns but also increase volatility. The bond component provides stability and income, balancing the overall risk profile. Regularly assess whether this allocation aligns with your risk tolerance and financial goals, and consider adjusting the weights to maintain the desired balance between growth and risk.

Sectors

  • Technology
    21%
  • Financials
    14%
  • Consumer Discretionary
    9%
  • Industrials
    8%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation shows a strong focus on technology (20.75%) and financial services (13.63%), with balanced exposure across other sectors like consumer cyclicals and healthcare. This diversification aligns with common benchmarks, providing a well-rounded approach. However, tech-heavy portfolios can be more volatile, especially during interest rate changes. It's important to monitor sector trends and adjust allocations if necessary to mitigate risk and capitalize on growth opportunities. Consider diversifying further into underrepresented sectors to enhance stability and potential returns.

Regions

  • North America
    46%
  • Asia Emerging
    10%
  • Europe Developed
    9%
  • Asia Developed
    6%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America (46.03%), with notable exposure to Asia Emerging (10.27%) and Europe Developed (9.21%). This distribution reflects a focus on established markets, which typically offer stability and growth. However, the limited exposure to Europe Emerging and Latin America may reduce potential diversification benefits. Comparing this to global benchmarks shows a conservative stance. Consider whether this geographic mix aligns with your investment goals and risk tolerance, and explore opportunities to diversify into underrepresented regions.

Dividends

  • iShares Global Aggregate Bond UCITS Dist 1.50%
  • Weighted yield (per year) 0.30%

The portfolio's dividend yield is modest at 0.3%, primarily contributed by the iShares Global Aggregate Bond UCITS with a yield of 1.5%. While dividends provide a steady income stream, they are not the primary focus for this portfolio. For cautious investors, dividends can enhance total returns and provide cash flow. If income is a priority, consider increasing allocation to higher-yielding assets. However, ensure that any changes align with your overall investment strategy and risk tolerance.

Ongoing product costs

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares Global Aggregate Bond UCITS Dist 0.10%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • Weighted costs total (per year) 0.18%

With a total expense ratio (TER) of 0.18%, the portfolio is cost-efficient, which supports better long-term performance. Low costs reduce the drag on returns, allowing more capital to compound over time. Compared to industry averages, this TER is competitive and aligns well with best practices for cost management. Regularly review your portfolio's costs and explore opportunities to further reduce fees. Consider whether lower-cost alternatives could replace higher-fee assets without compromising your investment strategy.

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.

The portfolio could be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio based on current assets. This approach ensures that for a given level of risk, the portfolio achieves the highest expected return. While the current allocation is well-balanced, exploring optimization can uncover potential improvements. However, remember that efficiency focuses on risk-return trade-offs and may not consider other goals like income or specific sector exposure. Regularly reassess your portfolio to ensure it remains aligned with your objectives.

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