A balanced and broadly diversified portfolio with a strong tilt towards high dividend and cyber security sectors

Report created on Jul 31, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio predominantly invests in ETFs, with a significant emphasis on the Vanguard FTSE All-World High Dividend Yield UCITS USD, constituting over half of the portfolio. This is complemented by a substantial allocation to the L&G Cyber Security UCITS ETF, with smaller positions in two versions of the Vanguard S&P 500 UCITS ETF. This composition suggests a strategic focus on generating income through dividends while also capitalizing on the growth potential within the cyber security sector. The blend of these ETFs provides a broad geographical and sectoral exposure, though the heavy weighting towards two specific ETFs indicates a concentrated risk in those areas.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.92%, with a maximum drawdown of -26.39%. The days contributing to 90% of the returns number just 19, highlighting the impact of significant market movements on portfolio performance. This historical performance, while robust, underscores the importance of understanding the volatility inherent in the market, particularly given the concentrated exposures.

Projection Info

Monte Carlo simulations, based on 1,000 iterations, project a wide range of potential outcomes for the portfolio, from a 5th percentile of 72.5% to a 67th percentile of 633.8%, with a median outcome of 449.5%. This analysis suggests a high degree of variability in potential future returns, emphasizing the portfolio's risk and reward dynamics. It's important to note that while Monte Carlo provides a spectrum of possible outcomes, it's based on historical data and cannot predict future market conditions with certainty.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, offering no asset class diversification outside of equities. While this can offer higher growth potential, it also increases the portfolio's vulnerability to market volatility. Diversifying across different asset classes, such as bonds or real estate, could provide a buffer against stock market downturns and contribute to a more stable performance over time.

Sectors Info

  • Technology
    42%
  • Financials
    18%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Health Care
    6%
  • Consumer Discretionary
    5%
  • Energy
    5%
  • Telecommunications
    4%
  • Utilities
    3%
  • Basic Materials
    3%
  • Real Estate
    1%

Sector allocation is heavily skewed towards technology, primarily due to the large investment in the L&G Cyber Security UCITS ETF, followed by financial services. This concentration in tech and cyber security sectors could lead to higher volatility, given the rapid pace of change and regulatory risks in these areas. However, it also presents substantial growth opportunities, particularly in the evolving landscape of digital security.

Regions Info

  • North America
    63%
  • Europe Developed
    16%
  • Japan
    8%
  • Asia Developed
    4%
  • Asia Emerging
    3%
  • Africa/Middle East
    3%
  • Australasia
    2%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, with significant exposure to developed European markets and Japan. Emerging markets are underrepresented, which may limit exposure to high-growth regions. While the current allocation benefits from the stability of developed markets, incorporating a more balanced geographic distribution could enhance growth prospects and reduce regional concentration risks.

Market capitalization Info

  • Large-cap
    39%
  • Mega-cap
    25%
  • Mid-cap
    21%
  • Small-cap
    10%
  • Micro-cap
    5%

The portfolio's market capitalization exposure leans towards large and mega-cap stocks, which typically offer stability and lower volatility compared to smaller companies. However, the presence of medium, small, and micro-cap stocks introduces a level of diversity and potential for higher growth, albeit with increased risk. This mix supports a balanced approach to growth and stability, though the weighting could be optimized based on risk tolerance and growth objectives.

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 Efficient Frontier, the portfolio may benefit from optimization to achieve a better risk-return ratio. Adjusting the asset allocation could enhance returns for a given level of risk or reduce risk for a given level of expected return. While the current allocation is broadly diversified, there's room to improve efficiency by reevaluating the balance between high-dividend and growth-oriented investments.

Dividends Info

  • Vanguard FTSE All-World High Dividend Yield UCITS USD 2.90%
  • Weighted yield (per year) 1.69%

The portfolio's focus on high dividend yield, particularly through the Vanguard FTSE All-World High Dividend Yield UCITS USD, contributes to a total yield of 1.69%. This strategy provides a steady income stream, which can be particularly appealing for income-focused investors or those seeking to reinvest dividends for compound growth. However, it's important to balance the pursuit of high dividends with the need for capital appreciation and diversification.

Ongoing product costs Info

  • L&G Cyber Security UCITS ETF GBP 0.69%
  • Vanguard FTSE All-World High Dividend Yield UCITS USD 0.29%
  • Vanguard S&P 500 UCITS ETF USD Accumulation 0.07%
  • Vanguard S&P 500 UCITS ETF 0.07%
  • Weighted costs total (per year) 0.43%

The Total Expense Ratio (TER) of 0.43% reflects the combined costs of the underlying ETFs, which are relatively low, supporting better long-term performance. Lower costs are beneficial as they directly enhance net returns. The portfolio's cost efficiency is commendable, particularly in the context of its diversified international exposure and specialized sector focus.

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