A moderately diversified portfolio with a focus on US equities and technology sector exposure

Report created on Dec 27, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio comprises a mix of ETFs, primarily focused on equities, with a significant 45% allocation to the iShares Core S&P 500 UCITS ETF. This heavy weighting towards US large-cap stocks is complemented by European equities, gold, mid-cap, emerging markets, small-cap, and technology sector ETFs. This composition leans towards a cautious investor profile, balancing growth opportunities with some degree of risk mitigation through diversification. To enhance diversification, consider adjusting allocations to include more varied asset types or regions, thereby reducing potential concentration risk.

Growth Info

Historically, the portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 12.16%, outperforming many conservative benchmarks. The maximum drawdown of -14.71% indicates moderate resilience during market downturns. While past performance is impressive, it is crucial to remember that it does not guarantee future results. To maintain this performance, regular reviews and adjustments in line with market conditions and personal goals are recommended.

Projection Info

Monte Carlo simulations, which use historical data to estimate future performance, suggest a positive outlook for the portfolio. With 996 out of 1,000 simulations showing positive returns, the median projected return is 330.99%. While these projections are encouraging, it's important to note that they are based on past data and assumptions, which may not hold in the future. Regular monitoring and adjustments can help align the portfolio with evolving market conditions and personal objectives.

Asset classes Info

  • Stocks
    90%
  • Other
    10%

The portfolio is heavily weighted towards equities, with nearly 90% allocated to stocks and about 10% in other assets, primarily gold. This allocation provides a good balance of growth potential and risk, aligning with a moderately diversified strategy. However, the lack of fixed income or alternative investments may limit downside protection in volatile markets. Consider incorporating additional asset classes to enhance stability and reduce overall risk.

Sectors Info

  • Technology
    25%
  • Financials
    13%
  • Industrials
    10%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The technology sector dominates the portfolio with a 24.77% allocation, followed by financial services and industrials. This concentration in technology could lead to higher volatility, especially during periods of interest rate changes. While sector diversification is generally aligned with global benchmarks, it may be beneficial to review sector weights periodically. This ensures that the portfolio remains well-balanced and aligned with market trends and personal risk tolerance.

Regions Info

  • North America
    63%
  • Europe Developed
    21%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Japan
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily skewed towards North America, with over 63% exposure, followed by Europe. This concentration may limit diversification benefits, especially if these regions face economic challenges. Consider increasing exposure to underrepresented regions like Asia and Latin America to enhance global diversification. This approach can help mitigate regional risks and capture growth opportunities in emerging 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 Efficient Frontier analysis suggests that the portfolio could be optimized to achieve a higher expected return of 17.88% with a similar risk level. Optimization involves reallocating existing assets to achieve the best possible risk-return ratio. While this approach can enhance performance, it requires careful consideration of personal risk tolerance and investment goals. Regularly revisiting the portfolio's efficiency can help ensure it remains aligned with desired outcomes.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Amundi Stoxx Europe 600 UCITS ETF C EUR 0.07%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • SSgA SPDR S&P 400 US Mid Cap 0.30%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Weighted costs total (per year) 0.13%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.13%. This cost efficiency is a crucial factor for long-term performance, as lower fees can significantly enhance net returns. Maintaining this cost structure is beneficial, but it's also worth exploring whether even lower-cost alternatives exist. Regularly reviewing expense ratios can help ensure that the portfolio remains cost-effective and aligned with financial goals.

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