A balanced portfolio heavily weighted in North American equities with low diversification.

Report created on Dec 12, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily invested in North American equities, with a dominant 66% allocation to the Vanguard FTSE North America UCITS ETF. This focus on a single region can lead to overexposure to market fluctuations in that area. While ETFs offer diversification within their holdings, the overall portfolio lacks balance across different asset classes. This composition may not fully capture potential growth from other regions or asset types. Consider diversifying into other geographic regions or asset classes, such as bonds or emerging markets, to reduce risk and enhance growth potential.

Growth Info

Historically, the portfolio has shown strong performance with a compound annual growth rate (CAGR) of 15.17%, but it has also experienced a maximum drawdown of 32.07%. This indicates that while the portfolio can achieve significant returns, it is also susceptible to substantial losses during market downturns. Investors should be aware that past performance is not indicative of future results, and market conditions can change. To mitigate potential losses, consider strategies such as rebalancing or incorporating more defensive assets.

Projection Info

Monte Carlo simulations project potential outcomes using historical data, and in this case, 1,000 simulations were conducted. The results show a median potential return of 506.7%, with a significant 67th percentile return of 702.21%. However, these projections are based on historical trends and do not guarantee future performance. While the simulations provide a range of possible outcomes, it's crucial to consider current market conditions and economic factors. Regularly reviewing and adjusting the portfolio based on these factors can help align it with your investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio is predominantly composed of stocks, making up nearly 100% of the total allocation, with negligible exposure to bonds and other asset classes. This concentration in equities can lead to higher volatility and risk, especially in uncertain market conditions. Diversifying into other asset classes like bonds or real estate can help stabilize returns and reduce overall portfolio risk. A balanced approach across different asset classes can provide a more resilient investment strategy.

Sectors Info

  • Technology
    31%
  • Financials
    14%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    4%
  • Real Estate
    3%
  • Basic Materials
    2%
  • Utilities
    2%

With a significant 30.5% allocation to the technology sector, the portfolio shows a strong bias towards tech stocks. While technology has been a high-growth sector, this concentration can increase vulnerability to sector-specific downturns. The portfolio also includes financial services, healthcare, and consumer cyclicals, but these sectors are less prominent. To mitigate risk, consider redistributing some investments into underrepresented sectors like utilities or consumer defensives, which may offer more stability during market volatility.

Regions Info

  • North America
    97%
  • Europe Developed
    1%
  • Japan
    1%

The portfolio's geographic allocation is heavily skewed towards North America, accounting for over 97% of the holdings. This lack of geographic diversification limits exposure to growth opportunities in other regions, such as emerging markets or developed economies outside North America. A more balanced geographic allocation can help reduce region-specific risks and capture broader market growth. Consider allocating a portion of the portfolio to international ETFs or funds to enhance geographic diversification.

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 can be optimized using the Efficient Frontier, which suggests a potential return of 16.97% at the same risk level. This optimization focuses on achieving the best possible risk-return ratio by adjusting allocations among the current assets. While this approach enhances efficiency, it doesn't necessarily improve diversification. To achieve optimal returns, consider rebalancing the portfolio to align with the Efficient Frontier's recommendations, while also exploring opportunities for broader diversification.

Dividends Info

  • Vanguard S&P 500 UCITS ETF 0.90%
  • Weighted yield (per year) 0.20%

The portfolio's dividend yield is relatively low at 0.2%, with the Vanguard S&P 500 UCITS ETF contributing a 0.9% yield. While dividends can provide a steady income stream, the current yield is modest and may not significantly impact overall returns. To enhance income potential, consider including higher-yielding dividend stocks or ETFs. This can create a more balanced portfolio that not only focuses on capital appreciation but also generates regular income.

Ongoing product costs Info

  • VanEck Morningstar US Sustainable Wide Moat UCITS ETF 0.49%
  • Vanguard FTSE North America UCITS 0.10%
  • Vanguard S&P 500 UCITS ETF 0.07%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is relatively low and beneficial for long-term returns. However, the VanEck Morningstar US Sustainable Wide Moat UCITS ETF has a higher cost of 0.49%. Reducing costs can enhance net returns over time, so it's important to regularly review and compare expense ratios. Consider replacing higher-cost funds with more cost-effective alternatives that offer similar exposure and performance.

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