A cautious portfolio with strong global equity focus and minimal gold exposure

Report created on Dec 27, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio primarily consists of the iShares Core MSCI World UCITS ETF, making up 90% of the allocation. This ETF provides broad exposure to global equities, which is a common choice for those seeking diversified, long-term growth. The remaining 10% is allocated to iShares Physical Gold ETC, offering a hedge against market volatility. This composition aligns with a cautious risk profile, balancing growth potential with stability. However, the heavy reliance on a single equity ETF may limit diversification benefits. To enhance diversification, consider gradually including other asset types or regions.

Growth Info

Historically, the portfolio has shown a strong CAGR of 12.31%, indicating robust growth over time. The maximum drawdown of -14.31% reflects moderate volatility, which is manageable given the portfolio's cautious risk classification. Comparing this performance to benchmarks can provide further insights into its effectiveness. While past performance is not a guarantee of future results, the historical data suggests a well-managed portfolio. Regularly reviewing performance against benchmarks can help ensure continued alignment with investment goals.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, shows a promising potential for this portfolio. With 1,000 simulations, the portfolio's median projected return is 515.15%, indicating a strong growth trajectory. However, it's crucial to note that these projections are based on historical data and cannot predict future market conditions with certainty. It’s wise to regularly reassess the portfolio’s risk and return expectations, especially in changing market environments.

Asset classes Info

  • Stocks
    90%
  • Other
    10%

The portfolio is heavily weighted towards stocks, with over 89% in equities and a small allocation to gold. This allocation is typical for growth-focused portfolios, providing potential for higher returns but also increased volatility. The minimal exposure to bonds and cash may limit downside protection during market downturns. Consider adding fixed-income assets to balance risk and provide more consistent returns, especially if market conditions become turbulent.

Sectors Info

  • Technology
    24%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is diverse, with significant exposure to technology (24%) and financial services (14%). This alignment is beneficial, as it mirrors global economic drivers. However, the concentration in technology could lead to higher volatility, especially during interest rate changes. While the sector distribution is generally balanced, regularly reviewing sector weights can help mitigate risks associated with overexposure to specific industries.

Regions Info

  • North America
    69%
  • Europe Developed
    14%
  • Japan
    5%
  • Australasia
    2%
  • Asia Developed
    1%

The portfolio's geographic exposure is predominantly North American (69%), with smaller allocations to Europe and Japan. This concentration in developed markets offers stability but may limit growth opportunities available in emerging markets. While the current allocation aligns with a cautious risk profile, introducing more geographic diversity could enhance potential returns and reduce regional risks. Consider gradually increasing exposure to underrepresented regions to achieve better diversification.

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.

Utilizing the Efficient Frontier, the portfolio could potentially achieve a higher expected return of 13.69% with the same risk level. This optimization involves reallocating existing assets for a better risk-return balance. While this approach may not guarantee diversification, it can enhance the portfolio's efficiency. Regularly reassessing asset allocation against the Efficient Frontier can help maintain an optimal risk-return ratio, aligning with investment goals.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Weighted costs total (per year) 0.18%

The portfolio's costs are relatively low, with a total expense ratio (TER) of 0.18% for the primary equity ETF. Low costs are advantageous for long-term investors, as they can significantly impact net returns. Keeping expenses minimal supports better compounding over time. Regularly reviewing and comparing costs with similar investment options can ensure continued cost-effectiveness, potentially improving long-term portfolio performance.

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