A Cautious Yet Highly Diversified Portfolio with Strong Historic Performance and Efficient Frontier Alignment

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

Cautious Investors

This portfolio is suitable for a cautious investor who values diversification and risk management. Such investors typically have a moderate risk tolerance and aim for steady growth over the long term. They prioritize capital preservation while seeking opportunities for potential returns. With a diversified mix of asset classes and geographic exposure, this portfolio aligns with goals of achieving consistent performance while mitigating risks. The cautious risk profile suggests a preference for stability, making it ideal for those with a longer investment horizon seeking balanced growth.

Positions

  • iShares S&P 500 Swap UCITS ETF USD (Acc)
    I500 - IE00BMTX1Y45
    45.20%
  • Amundi Stoxx Europe 600 UCITS ETF C EUR
    LYP6 - LU0908500753
    15.20%
  • iShares $ Treasury Bond 7-10yr UCITS ETF EUR Hedged (Dist)
    IBB1 - IE00BGPP6697
    13.00%
  • iShares Core MSCI Emerging Markets IMI UCITS
    IS3N - IE00BKM4GZ66
    7.20%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc)
    IUSN - IE00BF4RFH31
    4.30%
  • Amundi Index Solutions - Amundi Prime Japan UCITS ETF DR (C)
    PRAJ - LU2089238385
    4.10%
  • Xtrackers Bloomberg Commodity ex-Agriculture & Livestock Swap UCITS ETF 1C EUR Hedged
    DXSM - LU0292106167
    4.00%
  • Invesco Euro Government Bond 1-3 Year UCITS ETF
    EIB3 - IE00BGJWWY63
    3.00%
  • L&G Asia Pacific ex Japan Equity UCITS ETF
    ETLK - DE000A2PANR9
    2.40%
  • Xtrackers CSI300 Swap UCITS ETF 1C
    XCHA - LU0779800910
    1.60%

The portfolio is made up of a diverse mix of ETFs, with a significant allocation to the iShares S&P 500 Swap UCITS ETF USD (Acc) at 45.2%. It includes a mix of equities, bonds, and commodities, reflecting a cautious risk profile. The portfolio's diversification score is high, indicating a well-spread investment across different asset classes and regions. With a risk score of 3 out of 7, it leans towards the conservative side, which aligns with its cautious classification. This composition suggests a balanced approach, aiming to mitigate risk while still seeking growth opportunities.

Growth Info

Historically, the portfolio has shown a strong performance with a CAGR of 12.05%. The maximum drawdown of -13.51% indicates that while there have been periods of decline, the portfolio has managed to recover and grow over time. This performance suggests a resilient portfolio that can withstand market fluctuations while providing solid returns. For an investor looking for stability with a decent growth potential, this historical performance can be reassuring. Maintaining this performance could involve regular rebalancing and monitoring of market conditions to ensure alignment with investment goals.

Projection Info

Using a Monte Carlo simulation, which involves running multiple scenarios to predict future outcomes, the portfolio shows promising forward projections. With a hypothetical initial investment, the 50th percentile projection shows a potential return of 179.11%, while the 5th percentile indicates a 10.07% return. This suggests a strong likelihood of positive outcomes, with 962 out of 1,000 simulations showing gains. An annualized return of 8.6% across simulations aligns with the portfolio's cautious nature, providing a balance between risk and reward. Regular reviews and adjustments can help maintain these positive projections.

Asset classes Info

  • Stocks
    80%
  • Bonds
    16%
  • Other
    4%
  • Cash
    0%
  • No data
    0%

The portfolio is predominantly invested in stocks, making up 79.87% of the allocation. Bonds account for 15.99%, while other assets fill the remaining 4.07%. This distribution reflects a growth-oriented approach, with a substantial equity exposure complemented by bonds for stability. For a cautious investor, this mix provides a balance between potential growth and risk mitigation. To optimize, consider reviewing the bond allocation periodically to ensure it aligns with changing risk tolerance and market conditions. A balanced approach can help achieve both growth and preservation of capital.

Sectors Info

  • Technology
    19%
  • Financials
    13%
  • Industrials
    9%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector-wise, the portfolio is heavily weighted towards Technology at 19.27%, followed by Financial Services and Industrials. This indicates a focus on sectors with growth potential, balanced by exposure to more stable areas like Consumer Defensive and Utilities. Such diversification across sectors can reduce the impact of sector-specific downturns. Regularly reviewing sector performance and adjusting weights based on economic conditions can help maintain this balance. While the current allocation supports growth, staying informed about sector trends can provide opportunities for further optimization.

Regions Info

  • North America
    48%
  • Europe Developed
    16%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio has a strong North American focus, with 47.94% of assets allocated there. Europe Developed follows, with Asia Emerging and Japan also contributing. This allocation reflects a global perspective, seeking opportunities across various markets. While this geographic diversification can mitigate regional risks, it's essential to monitor economic and political developments that might affect these regions. Consider reviewing the geographic allocation periodically to ensure it aligns with global market trends and your investment strategy, potentially adjusting for emerging opportunities or risks.

Dividends Info

  • Invesco Euro Government Bond 1-3 Year UCITS ETF 0.70%
  • iShares $ Treasury Bond 7-10yr UCITS ETF EUR Hedged (Dist) 1.80%
  • Weighted yield (per year) 0.26%

The portfolio's dividend yield is modest at 0.26%, with contributions from the Invesco Euro Government Bond 1-3 Year UCITS ETF and iShares $ Treasury Bond 7-10yr UCITS ETF. This suggests a focus on growth rather than income generation. For investors seeking regular income, this yield might be lower than desired. Consider reviewing the dividend-paying assets and exploring options to enhance income without significantly altering the risk profile. Balancing growth and income can provide a more comprehensive investment strategy, catering to various financial goals.

Ongoing product costs Info

  • Xtrackers Bloomberg Commodity ex-Agriculture & Livestock Swap UCITS ETF 1C EUR Hedged 0.39%
  • Invesco Euro Government Bond 1-3 Year UCITS ETF 0.10%
  • L&G Asia Pacific ex Japan Equity UCITS ETF 0.10%
  • iShares S&P 500 Swap UCITS ETF USD (Acc) 0.07%
  • iShares $ Treasury Bond 7-10yr UCITS ETF EUR Hedged (Dist) 0.10%
  • 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%
  • Amundi Index Solutions - Amundi Prime Japan UCITS ETF DR (C) 0.05%
  • Xtrackers CSI300 Swap UCITS ETF 1C 0.50%
  • Weighted costs total (per year) 0.11%

The portfolio's costs are relatively low, with a Total TER of 0.11%. This indicates an efficient cost structure, allowing more of the investment returns to be retained. Keeping costs low is crucial for long-term portfolio growth, as high fees can erode returns over time. Regularly reviewing the expense ratios of individual ETFs and considering lower-cost alternatives when possible can help maintain this efficiency. By focusing on cost-effective investments, the portfolio can achieve better net returns, aligning with the goal of maximizing growth while managing expenses.

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.

The portfolio is well-positioned on the efficient frontier, indicating it is efficiently balanced for its level of risk. While it is not the optimal portfolio in terms of expected return, it offers a reasonable balance between risk and reward. Investors can consider adjusting their risk preferences along the efficient frontier to either take on more risk for higher potential returns or reduce risk for greater stability. For now, focusing on maintaining this balance and periodically reviewing the portfolio's alignment with personal risk tolerance and financial goals is recommended.

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