Balanced portfolio with a strong focus on European equities and low diversity

Report created on Sep 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards European equities, with a significant allocation in an S&P 500 ETF for geographic diversification. The concentration in just three ETFs, all within the equity asset class, suggests a focused investment strategy but with low diversification across sectors and geographies. This structure is typical for investors targeting specific market exposures, yet it carries an inherent concentration risk, particularly within the European market.

Growth Info

The portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.31%, which is quite robust. However, the maximum drawdown of -34.39% indicates a significant level of volatility and risk, particularly during market downturns. The performance metrics suggest that while the portfolio has the potential for high returns, it also exposes investors to considerable market risk. This performance profile is important for understanding the balance between risk and reward over time.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a wide range of potential returns for this portfolio. The 50th percentile outcome suggests a substantial potential for growth, but the wide spread between the 5th and 67th percentiles indicates a high degree of uncertainty. These projections are useful for setting realistic expectations, though it's crucial to remember that they are based on past performance, which is not a reliable indicator of future results.

Asset classes Info

  • Stocks
    40%

The portfolio's allocation is entirely in stocks, with no representation from other asset classes such as bonds or real estate. This concentration increases the portfolio's sensitivity to stock market fluctuations. Diversifying across different asset classes can help mitigate risk, as different asset classes often react differently to the same economic events, smoothing out returns over time.

Sectors Info

  • Financials
    10%
  • Industrials
    8%
  • Technology
    5%
  • Consumer Discretionary
    4%
  • Health Care
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Telecommunications
    2%
  • Utilities
    2%
  • Basic Materials
    1%

Sector allocation is relatively concentrated in financial services, industrials, and technology, with limited exposure to other sectors. This concentration can amplify sector-specific risks but may also offer higher growth potential in these areas. Diversifying across a broader range of sectors could help reduce volatility and improve the portfolio's resilience to sector-specific downturns.

Regions Info

  • Europe Developed
    39%
  • North America
    1%

The portfolio's geographic allocation is heavily skewed towards Europe, with a modest allocation to North America. This concentration in developed European markets may limit exposure to growth opportunities in other regions, such as Asia or emerging markets. Increasing geographic diversification could enhance the portfolio's growth potential and reduce the impact of regional economic downturns.

Market capitalization Info

  • Mega-cap
    25%
  • Large-cap
    10%
  • Mid-cap
    3%

The focus on mega and big-cap stocks suggests a preference for established, large companies, which are typically less volatile than smaller companies. However, this concentration may limit potential high-growth opportunities found in smaller-cap stocks. Balancing market cap exposure could introduce growth potential while managing risk.

Redundant positions Info

  • Amundi Index Solutions - Amundi EURO STOXX 50 UCITS ETF-C EUR
    Amundi Stoxx Europe 600 UCITS ETF C
    High correlation

The high correlation between the EURO STOXX 50 and Stoxx Europe 600 ETFs indicates a redundancy that does not contribute to diversification. This overlap suggests that the portfolio may not be as diversified as intended, as these assets are likely to respond similarly to market conditions. Reducing overlap by selecting assets with lower correlation could enhance portfolio diversification and risk management.

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.

Considering the portfolio's current composition and the high correlation between some assets, there's room for optimization towards achieving a better risk-return profile. Utilizing the Efficient Frontier could help identify an optimal mix of assets that maximizes returns for a given level of risk. This process would involve reducing overlapping exposures and possibly introducing non-correlated assets to enhance diversification.

Ongoing product costs Info

  • Amundi Index Solutions - Amundi EURO STOXX 50 UCITS ETF-C EUR 0.09%
  • Amundi Stoxx Europe 600 UCITS ETF C 0.07%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from low management costs, with Total Expense Ratios (TERs) for the included ETFs being quite competitive. Lower costs directly contribute to higher net returns over time, making cost efficiency a key aspect of long-term investment success. Maintaining a focus on keeping costs low while seeking opportunities for diversification and growth remains a prudent strategy.

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