A highly diversified cautious portfolio with global exposure and moderate growth potential

Report created on Dec 27, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of ETFs, with 80% in the Vanguard FTSE All-World UCITS ETF, 10% in iShares Physical Gold ETC, and 10% in Vanguard ESG Global All Cap UCITS ETF. This structure leans heavily on global equity exposure, complemented by a small allocation to gold. Compared to a typical cautious portfolio, there is a significant emphasis on equities, which can offer growth potential but might introduce volatility. To align with a cautious risk profile, consider slightly increasing allocations to more stable, income-generating assets to balance growth with preservation.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 10.94%, indicating robust performance. The maximum drawdown of 14.01% suggests resilience during market downturns. Compared to benchmarks, this performance aligns well, offering a solid growth trajectory with manageable risk. However, past performance does not guarantee future results. To maintain this growth, ensure the portfolio remains diversified and periodically reassess asset allocations to adapt to changing market conditions.

Projection Info

Using Monte Carlo simulations, which predict potential future outcomes based on historical data, the portfolio's median projection is a 376.09% return. This suggests a favorable outlook, though simulations inherently carry uncertainty. The high number of simulations with positive returns indicates a strong probability of achieving gains. However, remember that these projections are not guarantees. Regularly reviewing the portfolio and adjusting based on emerging trends can help capitalize on potential growth while managing risks.

Asset classes Info

  • Stocks
    90%
  • Other
    10%

The portfolio is predominantly allocated to stocks (approximately 90%), with a small allocation to gold (10%). This concentration in equities provides growth potential but may introduce volatility, especially in a cautious portfolio. Diversification across asset classes is crucial for risk management. To enhance stability, consider incorporating more fixed-income assets or other alternative investments. This can help cushion against market fluctuations and align more closely with a cautious investment strategy.

Sectors Info

  • Technology
    23%
  • Financials
    15%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is led by technology (23.46%), followed by financial services (14.94%) and healthcare (9.66%). This distribution is relatively balanced, though tech-heavy portfolios can experience higher volatility during interest rate changes. Ensuring sector diversity helps mitigate sector-specific risks. To optimize, periodically review sector weightings and consider adjusting to maintain a balanced exposure that aligns with market trends and personal risk tolerance.

Regions Info

  • North America
    59%
  • Europe Developed
    13%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (59.19%), with smaller allocations to Europe and Asia. This aligns with global benchmarks but may expose the portfolio to region-specific risks. A more balanced geographic distribution can help mitigate these risks and enhance diversification. Consider increasing exposure to underrepresented regions, which may offer growth opportunities and reduce reliance on any single market's performance.

Redundant positions Info

  • Vanguard ESG Global All Cap UCITS ETF (USD) Accumulating
    Vanguard FTSE All-World UCITS ETF USD Accumulation
    High correlation

The portfolio contains highly correlated assets, particularly between the Vanguard ESG Global All Cap UCITS ETF and the Vanguard FTSE All-World UCITS ETF. High correlation can limit diversification benefits, as these assets may move similarly during market shifts. To enhance diversification, consider replacing one of these ETFs with a less correlated asset. This adjustment can help manage risk and improve the portfolio's overall resilience against market volatility.

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 current portfolio can be optimized using the Efficient Frontier, potentially increasing expected returns from 12.38% to 13.19% with the same risk level. The Efficient Frontier helps identify the best possible risk-return ratio by adjusting asset allocations. While the current setup is solid, exploring optimization could enhance performance. Focus on reducing highly correlated assets to unlock diversification benefits and achieve a more efficient risk-return balance.

Ongoing product costs Info

  • Vanguard ESG Global All Cap UCITS ETF (USD) Accumulating 0.24%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.20%

The portfolio's total expense ratio (TER) is a low 0.2%, which is commendable and supports better long-term returns by minimizing costs. Lower costs mean more of your investment returns stay in your pocket. This efficient cost structure aligns well with investment best practices. To maintain this advantage, continue monitoring expense ratios and consider replacing higher-cost assets with similar lower-cost options if available.

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