Balanced portfolio with a strong equity focus and global exposure
Report created on Jul 29, 2025Risk profile
4/7
Diversification profile
5/5
Positions
-
VW Vanguard FTSE All-World UCITS ETF USD Accumulation
VWRA - IE00BK5BQT80 88.00% -
VA Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation
VAGS - IE00BG47K971 12.00%
This portfolio is predominantly comprised of equities (88%) through the Vanguard FTSE All-World UCITS ETF, with a smaller allocation to bonds (12%) via the Vanguard Global Aggregate Bond UCITS ETF. This allocation reflects a balanced risk profile, leaning towards growth with its heavy equity weighting. The diversification is broad, covering multiple sectors and geographic regions, which is beneficial for spreading risk and capturing global market performance.
Growth
Historically, the portfolio has demonstrated solid performance with a Compound Annual Growth Rate (CAGR) of 11.23%. The maximum drawdown, which measures the largest single drop from peak to trough, was -30.15%, indicating a relatively high level of volatility, as expected with a stock-heavy portfolio. The days contributing to 90% of returns being so few suggests that timing the market is less critical than time in the market for achieving growth.
Projection
Using a Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a 121% increase, with a 5th percentile at a modest 1.8% growth, indicating potential downside risk. However, with 95.4% of simulations yielding positive returns, the forward-looking outlook remains generally optimistic.
Asset classes
- Stocks 88%
- Bonds 12%
The allocation to 88% stocks and 12% bonds is typical of a balanced portfolio that aims for growth while mitigating risk with fixed income assets. This mix allows for participation in market upswings through equities, with bonds providing a cushion during downturns. Given the investor's balanced risk profile, this allocation aligns well with seeking long-term growth while managing volatility.
Sectors
- Technology 22%
- Financials 16%
- Consumer Discretionary 9%
- Industrials 9%
- Health Care 8%
- Telecommunications 8%
- Consumer Staples 5%
- Energy 3%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
Sector allocation is diverse, with a significant tilt towards technology (22%) and financial services (16%). This reflects a common market trend where these sectors often lead in growth potential. However, heavy concentration in any sector can introduce sector-specific risks, such as regulatory changes or market sentiment shifts. Balancing sector exposure can mitigate these risks while still capturing growth.
Regions
- North America 57%
- Europe Developed 13%
- Japan 5%
- Asia Emerging 5%
- Asia Developed 3%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio is heavily weighted towards North America (57%), with meaningful exposure to developed Europe (13%) and emerging Asian markets (5%). This distribution suggests a strong bias towards established markets, which are typically less volatile than emerging ones. However, underexposure to emerging and frontier markets may limit potential high-growth opportunities.
Market capitalization
- Mega-cap 42%
- Large-cap 30%
- Mid-cap 15%
The market capitalization breakdown shows a preference for large (mega and big) cap stocks, which comprise 72% of the equity allocation. These companies are usually more stable and less volatile than their smaller counterparts. However, the absence of small and micro-cap investments may limit exposure to high-growth potential segments of the market.
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.
Considering the Efficient Frontier, the portfolio's current allocation between equities and bonds suggests it is positioned for a balanced risk-return profile. However, there may be room for optimization by adjusting the allocation slightly or diversifying into other asset classes. This could potentially enhance returns for the same level of risk or reduce volatility without significantly compromising growth.
Ongoing product costs
- Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation 0.10%
- Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
- Weighted costs total (per year) 0.21%
With a total expense ratio (TER) of 0.21%, the portfolio is cost-efficient, which is crucial for long-term growth. Lower costs mean more of the investment's return is kept by the investor, compounding over time. This efficiency is commendable and aligns with best practices for maximizing investment returns.
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