A cautious portfolio with a blend of global equities bonds and a touch of crypto

Report created on Jan 28, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio consists of 55% stocks, 15% bonds, and 5% other assets, primarily through ETFs. This structure leans towards equities, with a significant portion in global and U.S. markets, while maintaining a small allocation to bonds and crypto. Compared to a typical cautious benchmark, this portfolio has a higher equity allocation, potentially increasing volatility. A more balanced allocation with increased bonds could align better with cautious investor profiles. Consider evaluating the equity-bond split to ensure it matches your risk tolerance.

Growth Info

Historically, this portfolio has delivered a strong CAGR of 11.19% with a max drawdown of -11.52%. These figures suggest a robust performance, especially for a cautious profile. However, past performance doesn't guarantee future results. The max drawdown indicates that the portfolio experienced moderate volatility, which might be higher than expected for a cautious investor. Regularly reviewing performance against benchmarks can help ensure the portfolio remains aligned with your risk tolerance and goals.

Projection Info

Using Monte Carlo simulations, the portfolio shows a wide range of potential outcomes, with a median return of 240.6%. Monte Carlo analysis uses historical data to predict future performance, but remember, it's not foolproof. The 5th percentile projection of -38.3% highlights downside risks. While simulations provide insights, they can't predict exact outcomes. It's wise to prepare for various scenarios and ensure your portfolio can withstand potential downturns, aligning with your risk tolerance.

Asset classes Info

  • Stocks
    55%
  • Bonds
    15%
  • Other
    5%

The asset allocation is heavily weighted towards stocks at 55%, with bonds at 15% and a small crypto exposure. This allocation provides growth potential but may not offer the stability a cautious investor might seek. Diversification across asset classes can reduce risk and improve returns over time. Consider increasing bond exposure to enhance stability, especially in volatile markets. A more balanced allocation could better align with a cautious investment approach.

Sectors Info

  • Technology
    18%
  • Financials
    7%
  • Consumer Discretionary
    7%
  • Health Care
    6%
  • Telecommunications
    5%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Real Estate
    1%
  • Basic Materials
    1%
  • Utilities
    1%

The portfolio's sector allocation includes a notable 18% in technology, followed by financial services and consumer cyclicals. This tech-heavy focus might increase volatility, especially during economic shifts. Sector diversity can mitigate risks associated with specific industries. A more balanced sector allocation could help reduce potential volatility. Consider diversifying across sectors to align with a cautious investment strategy, ensuring exposure to defensive sectors like healthcare and consumer staples.

Regions Info

  • North America
    54%
  • Europe Developed
    1%

Geographic exposure is concentrated in North America at 54%, with minimal allocation to Europe and Asia. This concentration may increase risk if the U.S. market underperforms. Geographic diversification can help mitigate regional risks and capture growth opportunities globally. Consider increasing exposure to other developed and emerging markets to enhance diversification. A more balanced geographic allocation can improve risk management and align with a cautious investment approach.

Market capitalization Info

  • Large-cap
    22%
  • Mega-cap
    19%
  • Mid-cap
    13%
  • Small-cap
    1%

The portfolio is primarily invested in large (big and mega) market cap stocks, with limited exposure to small caps. This focus on large caps can provide stability and lower risk, aligning with a cautious profile. However, small caps can offer growth potential. A more balanced allocation across market caps could enhance diversification. Consider gradually increasing small and medium cap exposure to capture growth opportunities while maintaining a cautious stance.

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 could benefit from optimization using the Efficient Frontier, which seeks to achieve the best possible risk-return ratio. This method considers the current assets and their allocations, aiming to enhance efficiency. It's important to note that optimization focuses on risk-return balance, not diversification. Regularly reassessing your portfolio's position on the Efficient Frontier can help ensure it remains aligned with your risk tolerance and investment goals.

Ongoing product costs Info

  • iShares MSCI World SRI UCITS ETF EUR (Acc) 0.23%
  • Invesco Euro Government Bond 1-3 Year UCITS ETF 0.10%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.10%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.10%. Low costs support better long-term performance by reducing the drag on returns. Keeping expenses in check is crucial for maximizing net returns, especially for cautious investors. Regularly review and compare costs to ensure they remain competitive. This focus on cost efficiency aligns well with prudent investment practices and enhances overall portfolio performance.

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