A growth-focused portfolio with high tech concentration and limited emerging market exposure

Report created on Dec 29, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio consists of four ETFs, with a significant weighting in the iShares Edge MSCI World Momentum Factor UCITS ETF at 49%. The iShares NASDAQ 100 UCITS ETF follows at 32%, indicating a strong focus on growth-oriented stocks. The iShares Automation & Robotics ETF adds a thematic element at 12%, while the iShares Core MSCI Emerging Markets IMI UCITS ETF provides limited exposure to emerging markets at 7%. Compared to common benchmarks, this composition leans heavily towards momentum and technology-driven growth, which can offer high returns but also increased volatility. Consider diversifying by adding more defensive or income-generating assets to balance risk.

Growth Info

Historically, the portfolio has performed impressively with a Compound Annual Growth Rate (CAGR) of 16.59%. This suggests strong growth potential, particularly given the portfolio's focus on momentum and technology sectors. However, it's important to note that past performance doesn't guarantee future results, and the portfolio has experienced a maximum drawdown of -23.85%, indicating potential volatility. To mitigate this, consider strategies to protect against downturns, such as increasing diversification or using hedging techniques.

Projection Info

Forward projections using Monte Carlo simulations show a wide range of potential outcomes, with a median (50th percentile) return of 550.23% and a 67th percentile return at 808.98%. Monte Carlo simulations use historical data to model future performance, but remember that these are probabilistic forecasts and not certainties. While the portfolio shows strong growth potential, be prepared for variability in returns. Regularly reviewing and adjusting allocations can help manage risk and align with changing market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising over 99% of the allocation. This concentration in equities suggests a focus on capital appreciation, but it also increases exposure to market volatility. A more balanced allocation across different asset classes, such as bonds or real estate, could enhance diversification and reduce risk. This is particularly relevant for balanced investors seeking to maintain steady growth while managing potential drawdowns.

Sectors Info

  • Technology
    41%
  • Financials
    12%
  • Telecommunications
    10%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    6%
  • Consumer Staples
    5%
  • Utilities
    3%
  • Real Estate
    1%
  • Energy
    1%
  • Basic Materials
    1%

The sector allocation is heavily skewed towards technology at 41%, followed by financial services and communication services. While this tech-heavy focus can drive significant growth, it also exposes the portfolio to sector-specific risks, such as regulatory changes or market corrections. Balancing the portfolio by increasing exposure to underrepresented sectors like energy or consumer staples could provide more stability and reduce reliance on the tech sector's performance.

Regions Info

  • North America
    79%
  • Europe Developed
    8%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America, accounting for over 79% of the allocation. This concentration may limit diversification benefits and expose the portfolio to regional risks. Expanding geographic exposure, especially in underrepresented regions like Asia or Europe, can help mitigate these risks and capture growth opportunities in diverse markets. Consider gradually increasing allocations to emerging markets for potential high-growth opportunities.

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 potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio based on current assets. This involves adjusting allocations to achieve maximum expected return for a given level of risk. While this optimization doesn't guarantee diversification, it helps ensure the portfolio is operating efficiently. Regularly reviewing and rebalancing can help maintain this efficiency as market conditions change.

Ongoing product costs Info

  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares Edge MSCI World Momentum Factor UCITS ETF 0.30%
  • iShares Automation & Robotics UCITS ETF USD (Acc) 0.40%
  • Weighted costs total (per year) 0.32%

The portfolio's total expense ratio (TER) is 0.32%, which is relatively low and supports better long-term performance by minimizing cost drag on returns. However, it's always beneficial to review costs periodically. Consider whether lower-cost alternatives could achieve similar results, especially if there are significant fee discrepancies. Keeping expenses in check is crucial for maximizing net returns over time.

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