A balanced portfolio with strong technology focus and global diversification

Report created on Jan 2, 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 is heavily weighted towards the Vanguard FTSE All-World UCITS ETF, making up over 90% of the holdings. This ETF provides broad exposure to global equities, aligning with the goal of diversification. The remaining 10% is invested in the iShares S&P 500 Information Technology Sector ETF, which focuses on U.S. tech stocks. This composition suggests a balanced approach with a tilt towards growth-oriented sectors. While this structure offers substantial diversification, it may benefit from a slight increase in non-equity asset classes to enhance stability.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 13.99%, reflecting strong past performance. However, it also experienced a maximum drawdown of -33.19%, indicating significant volatility during downturns. Comparing this to typical balanced portfolios, the high growth rate is impressive but comes with increased risk. It’s crucial to understand that past performance doesn’t guarantee future results, and maintaining a long-term perspective is essential to weather potential market fluctuations.

Projection Info

The Monte Carlo simulation, using 1,000 scenarios, projects various outcomes based on historical data. With a median projected return of 1,140.26% and all simulations showing positive returns, the outlook is optimistic. However, these projections are based on historical trends and assumptions, which may not hold in the future. It's important to use these projections as a guide rather than a guarantee, and consider potential changes in market conditions that could impact future performance.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly allocated to equities, with nearly 100% in stocks and minimal exposure to other asset classes. This heavy equity concentration aligns with a growth-focused strategy but may increase vulnerability to market volatility. Diversifying into other asset classes, such as bonds or real estate, could help mitigate risk and provide more stable returns. Comparing this allocation to typical balanced portfolios, a more diversified approach might enhance risk management and long-term stability.

Sectors Info

  • Technology
    33%
  • Financials
    15%
  • Health Care
    9%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio is notably concentrated in the technology sector, comprising over 33% of the holdings. This tech-heavy exposure can drive significant growth but also introduces higher volatility, especially during periods of interest rate changes or tech market corrections. Other sectors like financial services and healthcare provide some balance, but further diversification across sectors could reduce sector-specific risks. Ensuring a more even distribution might help in achieving consistent performance across various market conditions.

Regions Info

  • North America
    69%
  • Europe Developed
    13%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America, with over 68% exposure, followed by Europe and Asia. While this provides substantial global diversification, it is heavily weighted towards developed markets. Emerging markets, although riskier, offer growth potential that could enhance returns. Balancing geographic exposure by increasing allocation to underrepresented regions may improve diversification and capitalize on growth opportunities outside of North America.

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 current asset allocation can be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio. This involves adjusting the weights of existing assets to enhance efficiency without necessarily adding new ones. While the portfolio is already well-diversified, fine-tuning the allocation could improve returns relative to the risk taken. Consider periodically reviewing the allocation to ensure it remains aligned with the Efficient Frontier and investment objectives.

Ongoing product costs Info

  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.21%

With a total expense ratio (TER) of 0.21%, the portfolio costs are relatively low, supporting long-term performance by minimizing expenses. Low costs are crucial for enhancing net returns, especially over extended periods. Comparing this to industry averages, the portfolio is well-positioned in terms of cost efficiency. Continuing to monitor and manage costs, possibly by exploring even lower-cost alternatives, can further optimize returns and provide a competitive edge in achieving investment goals.

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