A balanced two ETF portfolio split between U S large cap and European broad market exposure

Report created on Aug 11, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

Observation: The portfolio is a simple two ETF structure with a strict 50/50 split between a Europe broad market ETF and a US large cap S&P 500 ETF resulting in 100% equity exposure. Education: A concentrated ETF pair simplifies tracking and rebalancing but limits the types of risk and return available compared with multi-asset solutions. Recommendation: Keep the clarity advantage but consider whether the all-equity stance and exact 50/50 split match the intended risk budget and time horizon; adding a non equity allocation or a third asset can widen diversification without much added complexity.

Growth Info

Observation: Historical metrics show a strong compound annual growth rate (CAGR) of 11.97% and a maximum drawdown near -34.2%. Education: CAGR measures average annual growth like the steady speed of a car over a long trip while max drawdown shows the worst peak to trough loss — useful to size emotional and financial tolerance for declines. Recommendation: Use these figures to stress test goals: for example a hypothetical €10,000 over ten years at 11.97% would roughly triple to about €31,000, but expect deep interim drops; plan liquidity and time horizon assuming similar volatility could recur.

Projection Info

Observation: Monte Carlo simulation with 1,000 runs produced a median end value well above the start and a 5th percentile that shows potential loss scenarios. Education: Monte Carlo uses repeated random draws from historical return patterns to estimate possible outcomes; it’s a way to see a spread of futures not a prediction. Recommendation: Treat simulated percentiles as scenario guides — the median and 67th percentiles imply upside potential but the 5th percentile shows tail risk; use these results to check emergency cash, bond cushions, or risk limits rather than as certainties.

Asset classes Info

  • Stocks
    100%

Observation: The allocation is 100% equities with no material exposure to fixed income or alternatives, matching the “Stock 100%” classification and a moderately diversified score. Education: Asset class diversification (stocks, bonds, cash, alternatives) reduces portfolio volatility because different assets often move differently; a single-class portfolio will mirror equity market swings closely. Recommendation: If the aim is balanced risk, consider introducing a bond sleeve or a low volatility allocation sized to the risk tolerance to lower drawdown magnitude and smooth returns, especially for medium term goals.

Sectors Info

  • Technology
    22%
  • Financials
    18%
  • Industrials
    13%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    4%
  • Utilities
    3%
  • Basic Materials
    3%
  • Real Estate
    2%

Observation: Sector weights show a tech tilt at 22% plus meaningful financials and industrials exposure; overall sector mix is concentrated relative to a fully diversified global benchmark. Education: Sector concentration can boost returns when specific industries lead but also raises cyclicality — for instance technology can spike in growth phases and fall sharply on interest rate shocks. Recommendation: Monitor sector drift and rebalance or use small tactical tilts only if intentional; otherwise aim for a sector mix closer to broad market composition to avoid single sector shocks driving portfolio outcomes.

Regions Info

  • North America
    51%
  • Europe Developed
    49%

Observation: Geographic split is almost evenly split between North America (51%) and Developed Europe (49%) with negligible exposure elsewhere. Education: Regional balance reduces single-market dependence but is still missing Asia and emerging markets exposure which often provide distinct growth drivers and different economic cycles. Recommendation: Decide whether the near parity is intentional; if broader global exposure is a goal, consider a modest allocation to Asia and emerging markets over time to capture diversification and potential higher growth but accept higher local volatility and geopolitical risk.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    34%
  • Mid-cap
    17%
  • Small-cap
    1%

Observation: Market cap breakdown is dominated by mega and large caps (Mega 48% Big 34%) with modest mid cap and tiny small cap presence. Education: Large caps tend to offer more stability, better liquidity and lower idiosyncratic risk while mid and small caps historically offer higher long term return potential with higher volatility. Recommendation: If the objective is to enhance long term returns and tolerate more volatility, gradually increase mid and small cap exposure; otherwise maintain large cap bias for stability and lower trading friction especially in tax sensitive accounts.

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.

Ongoing product costs Info

  • Amundi Stoxx Europe 600 UCITS ETF C EUR 0.07%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.07%

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