A balanced portfolio with global exposure and a focus on technology and gold
Report created on Feb 23, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
SW SPDR® MSCI World UCITS ETF GBP
SWLD - IE00BFY0GT14 57.00% -
VU Vanguard S&P 500 UCITS ETF
VUSA - IE00B3XXRP09 17.00% -
SG iShares Physical Gold ETC
SGLN - IE00B4ND3602 12.00% -
IN WisdomTree Artificial Intelligence UCITS ETF - USD Acc
INTL - IE00BDVPNG13 9.00% -
NU VanEck Uranium and Nuclear Technologies UCITS ETF A USD Acc GBP
NUCG - IE000M7V94E1 5.00%
The portfolio is predominantly composed of ETFs, with a significant 57% allocation in the SPDR® MSCI World UCITS ETF, providing broad global exposure. The Vanguard S&P 500 UCITS ETF accounts for 17%, focusing on the U.S. market. iShares Physical Gold ETC at 12% adds a hedge against market volatility. The remaining 14% is invested in specialized ETFs like WisdomTree Artificial Intelligence and VanEck Uranium, indicating a strategic interest in niche sectors. This composition suggests a diversified approach, balancing broad market exposure with targeted investments. To further enhance diversification, consider adding more asset classes or regions.
Growth
The portfolio's historical performance shows a robust Compound Annual Growth Rate (CAGR) of 19.44%, significantly outperforming many benchmarks. However, it experienced a maximum drawdown of -13.20%, indicating susceptibility to market downturns. The returns are concentrated, with 90% of gains occurring over just 12 days, suggesting potential volatility. While past performance is impressive, it's crucial to remember that it doesn't guarantee future results. To mitigate risks, consider strategies that might smooth out returns, such as diversifying into less correlated assets.
Projection
Monte Carlo simulations, using historical data, project a wide range of potential future outcomes for the portfolio. With 1,000 simulations, the portfolio shows a 5th percentile return of 255.5% and a median (50th percentile) return of 1,346.9%. The 67th percentile projects an even higher return of 1,972.7%. Nearly all simulations resulted in positive returns, with an average annualized return of 22.97%. While these projections offer insights into potential performance, remember that they rely on historical data, which may not predict future market conditions accurately.
Asset classes
- Stocks 88%
- Other 12%
The portfolio is heavily weighted towards stocks, comprising 88% of the total allocation, with the remaining 12% in other assets like gold. This allocation aligns with a moderately diversified strategy, providing growth potential while incorporating some risk mitigation through gold. Comparing to common benchmarks, this allocation is slightly stock-heavy, which may increase volatility but also offers higher growth potential. To enhance diversification, consider incorporating more asset classes, such as bonds, which can provide stability during market fluctuations.
Sectors
- Technology 28%
- Financials 12%
- Industrials 10%
- Consumer Discretionary 9%
- Health Care 8%
- Telecommunications 7%
- Energy 5%
- Consumer Staples 4%
- Utilities 2%
- Basic Materials 2%
- Real Estate 2%
The portfolio shows a notable concentration in the technology sector, accounting for 28% of the total allocation. This focus on technology suggests potential for high growth but also increased volatility, especially during market corrections or interest rate hikes. Other sectors like financial services (12%) and industrials (10%) provide some balance, but the overall allocation is tech-heavy compared to common benchmarks. To mitigate sector-specific risks, consider diversifying into sectors that may perform differently under varying economic conditions, such as consumer staples or utilities.
Regions
- North America 71%
- Europe Developed 10%
- Japan 4%
- Asia Developed 2%
- Australasia 1%
With 71% of the portfolio allocated to North America, there's a strong regional concentration, primarily in the U.S. This focus aligns with recent historical outperformance but may expose the portfolio to regional economic risks. Europe Developed accounts for 10%, offering some diversification. Other regions like Japan and Asia Developed have minimal representation. To reduce potential regional risk, consider increasing exposure to underrepresented areas like emerging markets, which can provide growth opportunities and further diversification.
Market capitalization
- Mega-cap 38%
- Large-cap 30%
- Mid-cap 16%
- No data 12%
- Small-cap 3%
- Micro-cap 1%
The portfolio's market capitalization distribution is skewed towards larger companies, with 38% in mega-cap and 30% in big-cap stocks. This focus on large-cap stocks typically offers stability and steady growth but may limit exposure to the potentially higher returns of smaller companies. Medium and small caps constitute 16% and 3%, respectively, providing some balance. To enhance diversification and potential growth, consider increasing the allocation to small and mid-cap stocks, which can offer higher growth potential but with increased risk.
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 has potential for optimization using the Efficient Frontier, which aims to achieve the best possible risk-return ratio based on the current assets. This involves adjusting the allocation to maximize returns for a given level of risk or minimize risk for a given return. While the portfolio is already balanced, exploring optimization could enhance performance by reallocating assets to achieve a more efficient balance. Consider consulting with a financial advisor to explore optimization strategies tailored to your risk tolerance and investment goals.
Dividends
- Vanguard S&P 500 UCITS ETF 0.20%
- Weighted yield (per year) 0.03%
The portfolio's dividend yield is relatively low, with the Vanguard S&P 500 UCITS ETF contributing a 0.20% yield, resulting in a total yield of 0.03%. This suggests a focus on growth over income generation. For investors seeking regular income, this might be insufficient. Dividends can provide a steady income stream and cushion against market volatility. If income is a priority, consider adding higher-yielding assets, such as dividend-focused ETFs or bonds, to balance growth with income generation.
Ongoing product costs
- WisdomTree Artificial Intelligence UCITS ETF - USD Acc 0.40%
- iShares Physical Gold ETC 0.25%
- Vanguard S&P 500 UCITS ETF 0.07%
- Weighted costs total (per year) 0.08%
The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.08%. This cost efficiency supports better long-term performance by minimizing the drag on returns. The WisdomTree Artificial Intelligence ETF has the highest individual cost at 0.40%, but overall, the portfolio's cost structure is well-aligned with best practices. Low costs are a significant advantage, allowing more of the portfolio's returns to compound over time. Continue monitoring costs to ensure they remain competitive and consider lower-cost alternatives if available.
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