Balanced and broadly diversified portfolio with a strong tilt towards global equities

Report created on Aug 2, 2025

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

This portfolio is structured around three Vanguard ETFs, focusing predominantly on equities with a 100% allocation to stocks. The largest position is in the Vanguard FTSE All-World UCITS ETF USD Accumulation, making up over half of the portfolio. This is complemented by significant allocations to the Vanguard S&P 500 UCITS ETF and the Vanguard FTSE Developed Europe UCITS ETF. The composition reflects a balanced risk profile with a broad diversification across geographies and sectors, though it leans heavily towards North America and developed European markets.

Growth Info

Historically, the portfolio has exhibited a Compound Annual Growth Rate (CAGR) of 12.76%, with a maximum drawdown of -33.70%. These figures suggest a strong performance relative to the inherent market risks, evidenced by a balanced risk score of 4 out of 7. The concentration in high-performing sectors like technology and financial services has likely contributed to these returns. However, the significant drawdown indicates exposure to market volatility, underscoring the importance of maintaining a diversified approach.

Projection Info

Forward projections based on Monte Carlo simulations, which use historical data to estimate future outcomes, show a wide range of potential portfolio values. The median outcome suggests a 406.7% increase, with 995 out of 1,000 simulations yielding positive returns. These projections are optimistic but should be interpreted with caution as they rely on past performance, which is not a reliable indicator of future results.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks positions it for potential high returns but also exposes it to higher volatility compared to portfolios that include bonds or other asset classes. This singular focus on equities is aligned with a balanced risk profile but might not suit those with a lower tolerance for market fluctuations or those nearing retirement who may prefer a more conservative allocation.

Sectors Info

  • Technology
    24%
  • Financials
    18%
  • Industrials
    12%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation shows a heavy emphasis on technology and financial services, which are sectors known for their volatility but also for offering substantial growth opportunities. Industrials, consumer cyclicals, and healthcare also have notable allocations, providing some diversification. However, the concentration in a few sectors could amplify risks during sector-specific downturns, suggesting a potential area for further diversification.

Regions Info

  • North America
    62%
  • Europe Developed
    27%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic exposure is heavily tilted towards North America and developed European markets, which aligns with the goal of tapping into established economies for stable returns. However, the minimal exposure to emerging markets and other regions may limit growth potential and diversification benefits, especially considering the dynamic growth prospects in these areas.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    34%
  • Mid-cap
    16%
  • Small-cap
    1%

The portfolio's focus on mega and big cap stocks, which comprise 82% of the allocation, is indicative of a preference for established, large companies likely to offer stability and consistent returns. However, the minimal exposure to medium, small, and micro-cap stocks means potentially missing out on the higher growth rates these companies can offer, albeit with increased risk.

Redundant positions Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    Vanguard S&P 500 UCITS ETF EUR
    High correlation

The high correlation between the Vanguard FTSE All-World UCITS ETF and the Vanguard S&P 500 UCITS ETF indicates overlapping exposures, reducing the diversification benefits of holding both. This redundancy suggests an opportunity to refine the portfolio's composition to enhance diversification without sacrificing potential returns.

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 state suggests room for optimization, particularly by addressing the issue of highly correlated assets. Adjusting the allocation to reduce overlap can enhance diversification benefits. Employing the Efficient Frontier concept could help in identifying the optimal mix of assets to achieve the best possible risk-return ratio, considering the portfolio's current composition.

Dividends Info

  • Vanguard S&P 500 UCITS ETF EUR 1.10%
  • Weighted yield (per year) 0.28%

The portfolio's overall dividend yield is relatively low, reflecting the growth-oriented nature of the holdings. While reinvested dividends can contribute to compounding returns over time, investors seeking regular income might consider reallocating a portion towards higher-yielding assets.

Ongoing product costs Info

  • Vanguard S&P 500 UCITS ETF EUR 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Vanguard FTSE Developed Europe UCITS ETF EUR Accumulation 0.10%
  • Weighted costs total (per year) 0.16%

With an average Total Expense Ratio (TER) of 0.16%, the portfolio benefits from relatively low costs, which is commendable. Lower costs directly translate to higher net returns for investors, making this an attractive feature of the portfolio. Vanguard's reputation for offering cost-efficient investment solutions is well reflected here.

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