Balanced Portfolio with High Global Exposure and Tech Dominance Offers Strong Growth Potential but Limited Asset Diversity

Report created on Dec 3, 2024

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

Positions

The portfolio is predominantly composed of the Vanguard FTSE All-World UCITS ETF, making up 99.27% of the holdings, with a small allocation to Apple Inc. at 0.73%. This setup ensures broad diversification across global markets, primarily through the ETF, which covers a wide range of sectors and geographies. However, the overwhelming concentration in a single ETF limits exposure to different asset classes, which could be a point of consideration for balancing risk and potential returns.

Growth Info

Historically, the portfolio has performed well, with a compound annual growth rate (CAGR) of 13.31%. This indicates strong past performance, although it has also experienced a maximum drawdown of -33.45%, reflecting significant volatility. The returns are concentrated, with just 22 days accounting for 90% of the gains. This suggests that while the portfolio can yield high returns, it is also subject to sharp fluctuations, which investors need to be prepared for.

Projection Info

Using a Monte Carlo simulation with 1,000 scenarios, the forward projection for the portfolio shows a wide range of potential outcomes. Assuming a hypothetical initial investment, the 5th percentile result is a 439.64% increase, while the median is 1,849.14%, and the 67th percentile is 2,852.52%. These projections indicate potential for substantial growth, though they also highlight the inherent uncertainty and risk involved. Investors should consider these factors when planning their investment strategy.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising nearly 100% of the asset allocation. This focus on equities suggests a growth-oriented strategy, but it also implies higher risk due to market volatility. While this can lead to significant returns, it may not provide the stability or income generation that other asset classes, such as bonds or real estate, might offer. Investors should evaluate whether this equity-heavy approach aligns with their risk tolerance and investment goals.

Sectors Info

  • Technology
    26%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is diverse, with a significant emphasis on technology, which makes up 25.84% of the portfolio. Other major sectors include financial services, healthcare, and consumer cyclicals. This spread across various sectors provides a level of diversification that can mitigate sector-specific risks. However, the high concentration in technology could expose the portfolio to sector volatility. Investors might consider balancing this by increasing exposure to more stable or counter-cyclical sectors.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America, accounting for 64.82% of the allocation. Europe Developed and Asia Emerging follow, but with significantly smaller shares. This concentration in North America suggests a reliance on the performance of this region's markets. While it benefits from the growth potential of the U.S. economy, it also exposes the portfolio to regional economic risks. Diversifying geographically could help hedge against such risks.

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's optimization indicates a strong growth potential, but the heavy reliance on a single ETF limits flexibility in risk management. To achieve a riskier or more conservative stance, investors can move along the efficient frontier by adjusting the balance between equities and other asset classes. Introducing bonds or alternative investments could make the portfolio less volatile, while increasing equity exposure might enhance growth potential. Prioritizing diversification and asset allocation can optimize the portfolio's performance.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey