A balanced and diversified portfolio with a strong focus on technology and North American equities

Report created on Dec 23, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of ETFs, with a significant emphasis on global equities, particularly in the technology sector. It holds a diversified mix of assets, including a 10% allocation to gold, providing a hedge against inflation and market volatility. Compared to common benchmarks, this portfolio leans heavily towards equities, which can offer higher potential returns but also come with increased risk. For a balanced profile, the allocation is well-structured, but there may be room to adjust the equity-to-gold ratio to further align with personal risk preferences and market conditions.

Growth Info

Historically, the portfolio has achieved an impressive CAGR of 13.15%, indicating strong growth over time. This performance is robust compared to typical market benchmarks, showcasing the portfolio's ability to capitalize on market upswings. However, the max drawdown of -16.99% highlights potential volatility during downturns. While past performance is not a guarantee of future results, this historical data provides confidence in the portfolio's capacity to generate returns. Investors should remain vigilant to market changes that could affect future performance and consider strategies to mitigate drawdowns.

Projection Info

Using Monte Carlo simulations, which project potential outcomes based on historical data, the portfolio shows promising forward projections. With a median return of 496.51% and a high probability of positive returns, the outlook is optimistic. However, it's important to note that these projections are based on historical trends, which may not reflect future market conditions. Investors should keep in mind that while simulations provide valuable insights, they are not foolproof predictions. Regularly reviewing the portfolio and staying informed about market trends will help in making informed adjustments.

Asset classes Info

  • Stocks
    90%
  • Other
    10%

The portfolio is heavily weighted towards stocks, comprising nearly 90% of the allocation, with a small portion in gold and minimal cash holdings. This significant stock allocation offers the potential for substantial growth, but also introduces higher volatility. Compared to typical balanced portfolios, this allocation is more aggressive. For those with a balanced risk profile, it might be beneficial to consider diversifying further into other asset classes, such as bonds or real estate, to enhance stability and reduce overall risk.

Sectors Info

  • Technology
    35%
  • Financials
    11%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    1%

A notable 35% of the portfolio is concentrated in the technology sector, which can drive strong growth but also introduces sector-specific risks, especially during periods of regulatory changes or interest rate hikes. The allocation across other sectors like financial services and consumer cyclicals provides some diversification, though technology remains dominant. To mitigate potential volatility, consider rebalancing to include more defensive sectors, such as healthcare or utilities, which can offer stability during economic downturns.

Regions Info

  • North America
    58%
  • Europe Developed
    19%
  • Asia Emerging
    5%
  • Asia Developed
    4%
  • Japan
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, representing nearly 58% of the allocation, with Europe Developed being the second-largest region. While this provides exposure to stable and mature markets, it limits diversification benefits that could be gained from emerging markets. A more balanced geographic allocation could enhance diversification and reduce regional risk. Consider increasing exposure to underrepresented regions like Asia or Latin America to capture growth opportunities and mitigate risks associated with regional economic fluctuations.

Redundant positions Info

  • iShares Core S&P 500 UCITS ETF USD (Acc)
    iShares Core MSCI World UCITS ETF USD (Acc)
    High correlation
  • iShares S&P 500 USD Information Technology Sector UCITS
    iShares NASDAQ 100 UCITS ETF USD (Acc)
    High correlation

The portfolio contains several highly correlated assets, particularly within the S&P 500 and technology-focused ETFs. High correlation means these assets tend to move in the same direction, which can limit diversification benefits. During market downturns, such correlation may result in more significant losses. To improve diversification, consider replacing some of the correlated assets with those that have lower correlation, thus enhancing the portfolio's resilience against market volatility and downturns.

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 focuses on maximizing returns for a given level of risk. This involves adjusting the current asset allocation to find the best possible risk-return ratio. By reducing highly correlated assets and exploring alternative allocations, the portfolio can potentially achieve greater efficiency. This process does not guarantee diversification but aims to optimize the balance between risk and return, ensuring the portfolio aligns with the investor's financial objectives and risk tolerance.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • Amundi Stoxx Europe 600 UCITS ETF C EUR 0.07%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • VanEck Semiconductor UCITS ETF 0.35%
  • Weighted costs total (per year) 0.16%

The portfolio's total expense ratio (TER) is 0.16%, which is relatively low and supports better long-term returns by minimizing costs. Low costs are beneficial as they enhance net returns, allowing more of the portfolio's growth to benefit the investor. However, it's essential to periodically review expense ratios and consider if any high-fee assets can be replaced with lower-cost alternatives. This cost-conscious approach ensures that the portfolio remains efficient and contributes positively to long-term financial goals.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey