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A cautious portfolio with a global focus and balanced risk exposure

Report created on Mar 7, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists of five ETFs, each holding a 20% allocation. The structure is evenly split between global equities and government bonds, with an 80% stock and 20% bond composition. This allocation provides a balanced approach to growth and income. Compared to typical benchmarks, the bond allocation is slightly lower, aligning with a cautious risk profile. This balanced structure ensures a moderate level of diversification, reducing risk while maintaining growth potential. It may be beneficial to periodically review the asset mix to ensure it aligns with evolving market conditions and personal risk tolerance.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 7.54%, indicating steady growth over time. The maximum drawdown of -24.93% reflects the largest peak-to-trough decline, highlighting potential volatility. Compared to a global equity benchmark, the drawdown is relatively moderate, suggesting effective risk management. However, historical performance is not a guarantee of future results. Investors should consider both the growth potential and the associated risks. Regularly reviewing performance against personal goals can help ensure the portfolio remains on track.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential outcomes, suggests an annualized return of 7.79%. With 1,000 simulations, the 5th percentile outcome is -1.7%, while the median is 147.9%, and the 67th percentile is 220.1%. This indicates a high likelihood of positive returns, with 948 simulations achieving this. While simulations provide a range of possible outcomes, they are based on historical data and assumptions that may not hold true in the future. It's important to use these projections as guides rather than guarantees.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%

The portfolio's allocation across asset classes includes 80% stocks and 20% bonds. This distribution aligns with a moderate risk profile, offering potential growth from equities while the bonds provide stability. Compared to typical benchmarks, the bond allocation is on the lower side, which may increase exposure to equity market volatility. However, this mix supports a cautious approach, balancing risk and return. Regularly reviewing the asset allocation can help ensure it remains aligned with personal investment goals and risk tolerance.

Sectors Info

  • Technology
    19%
  • Financials
    14%
  • Health Care
    9%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    3%
  • Basic Materials
    2%
  • Real Estate
    1%

The sector allocation is led by technology at 19%, followed by financial services at 14%, and healthcare at 9%. This distribution reflects a broad exposure to key sectors, with no single sector dominating. Compared to common benchmarks, the sector balance is well-aligned, reducing the risk of overexposure to any one area. However, technology-heavy portfolios may experience higher volatility during interest rate hikes. Investors should monitor sector trends and consider rebalancing if any sector becomes overly dominant or lags in performance.

Regions Info

  • North America
    51%
  • Europe Developed
    17%
  • Japan
    8%
  • Asia Developed
    2%
  • Asia Emerging
    1%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America at 51%, with Europe Developed at 17% and Japan at 8%. This allocation provides broad exposure to developed markets, which are typically more stable but may offer lower growth potential compared to emerging markets. Compared to a global benchmark, the portfolio is underexposed to emerging markets, which could limit diversification benefits. Investors might consider increasing exposure to emerging markets to enhance growth potential and diversify geographic risk.

Market capitalization Info

  • Large-cap
    34%
  • Mega-cap
    28%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio's market capitalization is primarily focused on big (34%) and mega (28%) caps, with medium caps at 18%. This allocation leans towards larger, more established companies, which tend to offer stability and lower volatility. However, the limited exposure to small and micro caps may reduce potential for higher growth, as smaller companies often have greater upside potential. Balancing the allocation to include more small and mid-cap stocks could enhance diversification and growth opportunities.

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.

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This portfolio can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio based on current assets. The Efficient Frontier helps investors understand how to adjust their asset allocation to achieve maximum returns for a given level of risk. It's important to note that optimization focuses on risk-return efficiency, not necessarily diversification. Regularly revisiting the portfolio's position on the Efficient Frontier can provide insights into potential improvements.

Ongoing product costs Info

  • iShares Global Govt Bond UCITS Acc 0.20%
  • iShares MSCI World Quality Factor UCITS 0.30%
  • iShares MSCI World Value Factor UCITS 0.30%
  • iShares Edge MSCI World Minimum Volatility UCITS 0.30%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.26%

The total expense ratio (TER) of the portfolio is 0.26%, which is relatively low and supports better long-term performance by minimizing costs. Each ETF's individual TER ranges from 0.20% to 0.30%, reflecting cost-effective management. Low costs are crucial for maximizing net returns, especially in a cautious portfolio where growth may be more moderate. Investors should continue monitoring costs, as reducing them further can enhance returns. Comparing TERs with similar funds can ensure competitive expense management.

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