A balanced portfolio with strong global exposure and moderate risk tolerance for long-term growth

Report created on Dec 9, 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 predominantly composed of ETFs, with a major allocation of 70% in the iShares Core MSCI World UCITS ETF. This indicates a focus on global equities. Additionally, 10% is allocated to Xetra-Gold, providing some exposure to commodities. The remaining 20% is split equally between the iShares MSCI EM Asia UCITS ETF and the iShares MSCI World Small Cap UCITS ETF. This composition suggests a strategy aimed at capturing broad market growth while maintaining some diversification through small caps and emerging markets. To enhance diversification, consider integrating other asset classes like bonds or real estate.

Growth Info

Historically, the portfolio has demonstrated a strong CAGR of 13.13%, reflecting impressive growth over time. However, it has also experienced a notable maximum drawdown of -30.54%, indicating periods of significant volatility. This performance suggests that while the portfolio has the potential for substantial returns, it is also subject to market fluctuations. Investors should be prepared for these ups and downs and ensure they have the risk tolerance to withstand such volatility. It's crucial to remember that past performance does not guarantee future results, and diversification can help mitigate risks.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, shows promising results. With 1,000 simulations, the portfolio has a median expected return of 299.05%, and 984 simulations predict positive returns. The annualized return across all simulations is 11.66%. While these projections are encouraging, they rely on historical data, which may not accurately predict future market conditions. Investors should use these projections as one of many tools in decision-making, remaining mindful of the inherent uncertainties in financial markets.

Asset classes Info

  • Stocks
    90%

The portfolio is heavily weighted towards stocks, comprising 89.6% of the total allocation. This high exposure to equities suggests a focus on capital appreciation. However, the minimal allocation to other asset classes, such as bonds and cash, may limit the portfolio's ability to cushion against market downturns. Diversifying across more asset classes can potentially reduce risk and enhance stability. Consider incorporating fixed-income securities or other alternative investments to balance the equity exposure and improve risk-adjusted returns.

Sectors Info

  • Technology
    23%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio's sector allocation is diverse, with technology leading at 22.91%, followed by financial services and consumer cyclicals. This distribution indicates a tilt towards sectors with growth potential. However, the concentration in technology may expose the portfolio to sector-specific risks. To mitigate these risks, consider rebalancing by increasing exposure to underrepresented sectors like utilities or real estate. A more balanced sector allocation can help reduce volatility and enhance the portfolio's resilience to economic shifts.

Regions Info

  • North America
    60%
  • Europe Developed
    12%
  • Asia Emerging
    6%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%

Geographically, the portfolio is primarily concentrated in North America, which accounts for over 60% of the allocation. While this provides exposure to a stable and mature market, it may limit diversification benefits. The portfolio also includes allocations to Europe, Asia, and other regions, but these are relatively small. To enhance geographic diversification, consider increasing exposure to regions like Asia or emerging markets, which may offer growth opportunities and reduce reliance on North American markets.

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 can be optimized using the Efficient Frontier to achieve a better risk-return ratio. Currently, the optimal portfolio has an expected return of 13.82% with a risk level of 10.29%, which is more favorable than the current setup. This optimization involves reallocating existing assets to achieve the best possible balance between risk and return. Investors should consider adjusting their asset allocation to align with the Efficient Frontier, ensuring that they are maximizing potential returns for their given level of risk.

Ongoing product costs Info

  • iShares MSCI EM Asia UCITS ETF 0.20%
  • 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) 0.20%

The portfolio's total expense ratio (TER) is relatively low at 0.2%, which is favorable for long-term investors. Lower costs mean more of the returns are retained, enhancing the overall performance. However, the iShares MSCI World Small Cap UCITS ETF has a slightly higher TER of 0.35%. To further reduce costs, consider exploring other investment options with lower expense ratios. Keeping an eye on costs is crucial, as even small differences can significantly impact long-term returns due to compounding effects.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey