A globally diversified ETF portfolio with a cautious risk profile and strong past performance

Report created on May 11, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed entirely of ETFs, offering a broad exposure across multiple sectors and geographies. With a significant portion allocated to the SPDR MSCI ACWI IMI UCITS ETF, it emphasizes global market participation. The inclusion of specialized ETFs, such as the VanEck Defense ETF and the Franklin FTSE India UCITS ETF, suggests a strategic tilt towards specific industries and emerging markets. The portfolio's structure, focusing on diversification through ETFs, aligns with a cautious risk profile, aiming to mitigate volatility while capturing growth across different economic sectors.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 16.22%, with a maximum drawdown of -17.37%. These figures indicate a strong performance relative to its cautious risk classification, especially considering the relatively short periods contributing most to its returns. This historical performance, while impressive, should be viewed with the understanding that past results do not guarantee future outcomes. The high CAGR suggests that the selected ETFs, despite the portfolio's cautious stance, have capitalized on growth opportunities effectively.

Projection Info

Forward-looking projections, based on Monte Carlo simulations, offer a range of potential outcomes, with a median increase of 915.8%. These simulations, which draw on historical data to estimate future performance, suggest a robust growth trajectory but also underscore the inherent uncertainty in investing. It's crucial to remember that these projections are hypothetical and should be used as one of many tools in decision-making, not as guarantees.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks, as represented by ETFs, aligns with a strategy focused on growth over income. This singular asset class approach simplifies the investment strategy but also concentrates risk in the equity market's performance. Diversifying across asset classes, including bonds or real estate, could provide a buffer against stock market volatility, potentially smoothing out returns over time.

Sectors Info

  • Technology
    21%
  • Industrials
    17%
  • Telecommunications
    14%
  • Financials
    13%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    3%
  • Real Estate
    3%
  • Utilities
    2%

With technology, industrials, and communication services as the top sectors, the portfolio is well-positioned to benefit from growth in these dynamic areas. However, this concentration also exposes it to sector-specific risks, such as regulatory changes or economic downturns affecting these industries disproportionately. Balancing sector exposure can help mitigate these risks while still capturing the growth potential of these leading sectors.

Regions Info

  • North America
    54%
  • Europe Developed
    23%
  • Asia Emerging
    11%
  • Japan
    6%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic distribution, heavily weighted towards North America and developed Europe, with a strategic allocation to emerging markets like India, offers a balanced mix of stability and growth potential. This global diversification helps spread risk across different economic environments, although the portfolio could benefit from increased exposure to underrepresented regions for even greater global balance.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    36%
  • Mid-cap
    18%
  • Small-cap
    8%
  • Micro-cap
    1%

The portfolio's emphasis on mega and big-cap stocks suggests a preference for established, stable companies likely to offer consistent returns. While this approach aligns with the portfolio's cautious risk profile, incorporating a greater mix of medium, small, or even micro-cap stocks could enhance potential for growth, albeit with increased volatility.

Redundant positions Info

  • iShares MSCI World Quality Factor UCITS
    SSgA SPDR ETFs Europe I Public Limited Company - SPDR MSCI ACWI IMI UCITS ETF
    High correlation

The high correlation between certain ETFs, such as the iShares MSCI World Quality Factor UCITS and the SPDR MSCI ACWI IMI UCITS ETF, indicates overlapping exposures that may limit the portfolio's diversification benefits. Reducing redundancy by reallocating from highly correlated assets to less correlated options could enhance the portfolio's diversification without necessarily increasing 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.

Optimizing for the Efficient Frontier suggests that the portfolio could achieve a higher expected return at a similar risk level by adjusting its asset allocation. This optimization process highlights the importance of continually reviewing and potentially adjusting the portfolio to maintain an optimal balance between risk and return. It's particularly relevant for ensuring that the portfolio remains aligned with the investor's risk tolerance and financial goals.

Ongoing product costs Info

  • Invesco EQQQ NASDAQ-100 UCITS ETF Acc 0.35%
  • Franklin Libertyshares ICAV - Franklin Ftse India Ucits ETF 0.19%
  • iShares MSCI World Quality Factor UCITS 0.30%
  • iShares MSCI World Value Factor UCITS 0.30%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • SSgA SPDR ETFs Europe I Public Limited Company - SPDR MSCI ACWI IMI UCITS ETF 0.40%
  • SPDR® MSCI Europe Communication Services UCITS ETF 0.18%
  • VanEck Morningstar Global Wide Moat UCITS ETF A USD 0.52%
  • Weighted costs total (per year) 0.32%

The portfolio's average Total Expense Ratio (TER) of 0.32% is relatively low, minimizing the drag on returns due to costs. Keeping costs in check is crucial for long-term investment success, especially in a cautiously positioned portfolio where excessive fees can erode modest gains. This focus on cost efficiency is commendable and should be maintained.

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