A globally diversified single-ETF portfolio with strong technology and North American exposure

Report created on Dec 27, 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 entirely invested in the Vanguard FTSE All-World UCITS ETF, which provides broad exposure to global equities. This single-ETF approach simplifies management and offers diversification across multiple regions and sectors. Compared to a typical balanced portfolio that might include bonds or other asset classes, this portfolio is heavily weighted towards stocks, indicating a focus on growth potential. While this can lead to higher returns, it also increases exposure to market volatility. Diversifying into other asset classes could help mitigate risks associated with equity market fluctuations.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 12.85%. This suggests strong growth over time, outperforming many traditional balanced portfolios. However, it has also experienced significant volatility, as indicated by a maximum drawdown of -33.45%. This means that during downturns, the portfolio value could decrease substantially. While past performance is not indicative of future results, understanding these trends can help manage expectations and prepare for potential market swings.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a wide range of potential returns. With a median projection of 445.28% and a positive return in 995 out of 1,000 simulations, the outlook is optimistic. However, the 5th percentile projection of 101.55% highlights the uncertainty inherent in market predictions. While simulations provide valuable insights, they rely on past data and assumptions that may not hold true in the future. It's essential to remain adaptable and regularly review the portfolio's alignment with your goals.

Asset classes Info

  • Stocks
    100%

With nearly 100% of the portfolio invested in stocks, the asset allocation is heavily skewed towards equities. This concentration can drive growth but also exposes the portfolio to significant market risk. Balanced portfolios often include bonds or other asset classes to cushion against volatility. While the current allocation aligns with a growth-focused strategy, considering a small allocation to less volatile asset classes could enhance stability, especially during market downturns.

Sectors Info

  • Technology
    26%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio is notably tech-heavy, with 25.65% allocated to the technology sector. This concentration can lead to higher returns during tech booms, but also increases vulnerability to sector-specific downturns. Financial services and healthcare also have significant weights, providing some balance. However, sectors like utilities and real estate are underrepresented, which might limit defensive capabilities during market corrections. Regularly reassessing sector weights can help maintain a balanced risk profile.

Regions Info

  • North America
    66%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic exposure is predominantly in North America, accounting for 65.54% of the portfolio. While this aligns with a focus on developed markets, it limits exposure to potentially high-growth regions like emerging markets. Europe and Asia have moderate representation, but regions like Latin America and Africa are minimally included. Diversifying geographically can mitigate risks associated with economic downturns in specific regions and capitalize on growth opportunities globally.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio benefits from a low Total Expense Ratio (TER) of 0.22%, which supports better long-term performance by minimizing costs. Low fees are particularly advantageous in accumulating ETFs, as they allow more capital to remain invested, compounding over time. Although the costs are already competitive, regularly reviewing fee structures ensures that the portfolio remains cost-effective, especially if considering additional investments.

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