A balanced and highly diversified portfolio with a strong emphasis on global equities

Report created on Mar 14, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio predominantly consists of 80% equities through the Vanguard FTSE All-World UCITS ETF, complemented by a 10% allocation to global government bonds and another 10% in the Vanguard S&P 500 UCITS ETF. This structure leans heavily towards equities, providing growth potential, while the bond component offers stability. Compared to a balanced benchmark, this portfolio has a higher equity allocation, which may increase potential returns but also volatility. Consider ensuring the bond allocation aligns with your risk tolerance and investment goals.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 10.20%, outperforming many balanced benchmarks. This growth is impressive, though the portfolio experienced a maximum drawdown of -30.64%, highlighting potential volatility. The concentration on equities, especially in the S&P 500, has driven performance. While past performance is not indicative of future results, the historical data suggests strong growth potential. Regularly review performance against benchmarks to ensure alignment with your risk tolerance.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data, the portfolio shows a 50th percentile growth of 157.3% and an annualized return of 8.11%. While 948 out of 1,000 simulations resulted in positive returns, it's crucial to remember that these projections are not guarantees. They provide a range of possible outcomes, helping to gauge potential risks and rewards. Regularly review these projections to ensure they align with your financial goals and risk appetite.

Asset classes Info

  • Stocks
    90%
  • Bonds
    10%

The portfolio's asset allocation is 90% stocks and 10% bonds, which is typical for a balanced portfolio with a growth tilt. This allocation provides a solid foundation for capital appreciation while maintaining some stability through bonds. Compared to benchmarks, the equity allocation is on the higher side, which may increase potential returns but also exposes the portfolio to higher volatility. Consider periodically reviewing the asset mix to ensure it aligns with your risk tolerance and financial objectives.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector-wise, the portfolio is heavily weighted towards Technology (24%), followed by Financial Services (15%) and Consumer Cyclicals (10%). This composition aligns well with global benchmarks, though the technology focus may increase volatility, especially during interest rate hikes. The diverse sector exposure supports risk management, but it's essential to monitor sector trends and potential impacts on portfolio performance. Regularly review sector allocations to ensure they reflect your investment strategy.

Regions Info

  • North America
    63%
  • Europe Developed
    11%
  • Japan
    5%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (63%), with Europe Developed (11%) and Japan (5%) following. This concentration aligns with global benchmarks but may expose the portfolio to regional risks. While the North American focus has historically been beneficial, consider whether increased diversification into emerging markets could enhance risk management and growth potential. Regularly assess geographic exposure to ensure it aligns with your investment goals.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    15%

The portfolio is primarily invested in mega-cap (42%) and big-cap (31%) stocks, with minimal exposure to medium-cap (15%) and no small or micro-cap stocks. This focus on larger companies provides stability and lower volatility, though it may limit growth potential compared to a more diversified market cap approach. Consider whether increasing exposure to smaller companies could enhance diversification and growth opportunities, depending on your risk tolerance.

Redundant positions Info

  • Vanguard S&P 500 UCITS Acc
    Vanguard FTSE All-World UCITS ETF USD Accumulation
    High correlation

The portfolio exhibits high correlation between the Vanguard S&P 500 UCITS Acc and Vanguard FTSE All-World UCITS ETF. While correlated assets can amplify returns during market upswings, they may limit diversification benefits during downturns. Reducing overlap between these ETFs could improve risk management. Consider diversifying across less correlated assets to enhance portfolio resilience, especially in volatile markets.

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 could benefit from optimization using the Efficient Frontier, which identifies the best risk-return ratio based on current assets and allocation. Removing highly correlated assets, like the overlapping ETFs, could enhance diversification and improve the portfolio's efficiency. Regularly review asset allocation and consider rebalancing to maintain optimal risk-return characteristics, ensuring alignment with your financial goals.

Ongoing product costs Info

  • iShares Global Govt Bond UCITS Acc 0.20%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • 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 0.20%, which is competitive and supports long-term returns by minimizing costs. Low costs are crucial for maximizing net returns, especially in a long-term investment strategy. Regularly review and compare expense ratios to ensure they remain competitive and aligned with your investment strategy. Consider whether cost savings could be achieved without compromising on diversification or performance.

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