A globally diversified portfolio focusing on total world stock with minimal costs

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

Balanced Investors

This portfolio suits an investor looking for a simple yet effective approach to global equity investment, with a moderate risk tolerance and a long-term investment horizon. It's ideal for someone who values broad diversification across sectors and geographies but prefers to avoid the complexity of managing multiple investments. The investor should be comfortable with the inherent volatility of a stock-focused portfolio and have the patience to ride out market fluctuations.

Positions

  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    100.00%

The portfolio is fully invested in the Vanguard Total World Stock Index Fund ETF Shares, providing broad exposure to the global stock market. This single-ETF strategy simplifies management while covering a wide range of sectors and geographies. The diversification is commendable, with investments spanning across technology, financial services, industrials, and more, across developed and emerging markets. However, the reliance on a single ETF for diversification, while efficient, limits the ability to fine-tune exposure to specific sectors or regions based on changing market conditions or personal investment goals.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 10.33%, with a maximum drawdown of -34.22%. These figures suggest that the portfolio has provided strong returns over time but also faced significant volatility, as indicated by the sizeable drawdown. It's important to remember that past performance is not indicative of future results, and investors should consider their risk tolerance when evaluating this performance. The days contributing most to returns highlight the impact of short-term market movements on overall performance.

Projection Info

Monte Carlo simulations, using historical data to project potential future outcomes, indicate a wide range of possible returns for this portfolio. With the majority of simulations showing positive returns, the projections suggest a favorable outlook. However, the significant spread between the 5th and 67th percentiles underscores the uncertainty inherent in these projections. Investors should view these results as one of many tools in making informed decisions, not as guarantees of future performance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The asset allocation is predominantly in stocks (99%), with a minimal cash holding (1%). This allocation is suitable for investors aiming for growth over the long term, as equities historically offer higher returns compared to other asset classes like bonds or cash. However, this high equity exposure also comes with increased volatility and risk, especially in short-term market downturns. Investors should ensure this aligns with their risk tolerance and investment horizon.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Real Estate
    3%
  • Utilities
    3%

The sectoral distribution within the portfolio is well-diversified, with significant allocations in technology, financial services, and industrials. This diversification helps mitigate sector-specific risks, but the heavy weighting in technology and financial services could expose the portfolio to higher volatility in these sectors. Investors might consider if this sectoral exposure aligns with their expectations for future market performance and risk tolerance.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic distribution shows a strong bias towards North America (65%), with lesser exposure to Europe, Asia, and other regions. This concentration in developed markets, particularly the U.S., may offer stability but could limit potential gains from faster-growing emerging markets. Diversifying further into underrepresented regions could provide better growth opportunities and risk mitigation against regional downturns.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega and big-cap stocks, which typically offer stability and consistent dividends but may have lower growth potential compared to smaller companies. Medium, small, and micro-cap stocks, while more volatile, can offer higher growth prospects. Balancing market cap exposure can enhance growth potential while managing volatility.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 1.80%

The portfolio's dividend yield of 1.80% contributes to its total return, providing a source of income in addition to potential capital gains. While not the primary focus of a growth-oriented portfolio, dividends can offer a cushion during market downturns and contribute to compounding returns over time. Investors should consider their income needs and tax implications when evaluating the importance of dividends.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.07%

With a total expense ratio (TER) of 0.07%, the portfolio is highly cost-efficient, maximizing the potential for net returns. Low costs are crucial for long-term investment success, as they compound over time and can significantly impact overall returns. This portfolio's low cost is a strong advantage, especially in comparison to actively managed funds or portfolios with higher expense ratios.

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