A globally diversified equity portfolio with cautious risk profile and strong focus on broad market exposure

Report created on Oct 8, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is built entirely from equity index ETFs, with the bulk in broad global and regional funds and a small tilt toward small caps and fintech. Compared with a typical cautious profile, it actually holds more growth-oriented assets and no bonds, which is unusual for a “cautious” label. This matters because a 100% equity mix can still swing sharply in downturns even if it looks diversified by region and sector. One useful step could be to decide whether the goal is truly equity-only growth or a smoother ride, and then adjust the mix of broad core funds versus additional stabilizing assets accordingly over time.

Growth Info

Using the reported 13.7% compound annual growth rate, 10,000 units invested at the start of the period would have grown to roughly 36,000 units, assuming no extra contributions. That clearly beats what many broad equity benchmarks managed over long stretches, especially for a cautious-labelled profile. It shows that the growth tilt has been rewarded in recent years. However, max drawdown of about -12% is based on a benign period and does not fully reflect severe bear markets. Past performance only shows what happened in specific conditions, so it should not be relied on as a guarantee of similar future outcomes.

Projection Info

The Monte Carlo analysis, which runs 1,000 simulated return paths using historical patterns, suggests a wide range of possible outcomes. A 5th percentile result of about 177% means even the weaker simulations roughly double the value, while the median near 533% shows strong potential upside. Monte Carlo is like rolling dice many times using the past as a guide, but markets can change regime and shocks can appear from nowhere. These projections are still encouraging as a planning tool. One step could be to use the lower percentile figures as a “stress-case” for goals, not the median or optimistic scenarios.

Asset classes Info

  • Stocks
    100%

All assets in this portfolio are stocks, with no allocation to bonds, cash-like instruments, or alternatives. Compared with many cautious or balanced benchmarks that blend shares and more stable assets, this is a much purer growth approach. The upside is simple structure and full participation in equity market gains, which aligns well with long time horizons. The trade-off is that downturns may feel sharper, and there is no built-in shock absorber. If the aim is to stay closer to a cautious risk profile, one useful step could be to introduce a modest slice of defensive assets over time, especially as major financial goals draw nearer.

Sectors Info

  • Financials
    24%
  • Technology
    21%
  • Industrials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    6%
  • Basic Materials
    5%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    3%

Sector exposure is broad and well spread, with financial services and technology at the top but not excessively dominant. This pattern is similar to many global equity benchmarks, which naturally lean toward sectors with the largest companies. That’s positive because it avoids extreme concentration in any single theme, while still giving healthy exposure to areas that have driven recent growth. The dedicated fintech slice adds a small but noticeable tilt toward innovation, which can increase both potential and volatility. It can help to check whether this tilt fits personal comfort: if growth themes feel exciting but stressful in downturns, keeping that satellite allocation small and controlled is a sensible approach.

Regions Info

  • North America
    42%
  • Europe Developed
    27%
  • Asia Developed
    11%
  • Australasia
    10%
  • Asia Emerging
    4%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographic exposure is nicely diversified, with a strong but not overwhelming weight in North America, solid holdings in developed Europe and Asia, and meaningful emerging markets. This mix is fairly close to global market standards, which is a strong sign of healthy diversification. It reduces reliance on any single economy, currency, or political system. However, it’s still worth remembering that global equities tend to be influenced heavily by US market moves. A simple practice is to review regional weights every year or two and check they still sit within personally comfortable ranges, especially if one region has run far ahead and now dominates overall risk.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    34%
  • Mid-cap
    14%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio leans clearly toward mega and large companies, with modest exposure to mid caps and a small slice of small and micro caps. This pattern lines up with typical global benchmarks, which are naturally dominated by the biggest listed firms. That’s helpful because large companies tend to be more liquid, widely researched, and often more resilient in rough markets. The dedicated small-cap position brings extra diversification and long-term growth potential, but also adds some bumpiness. Keeping the small and micro-cap share limited, as it is here, helps keep risk in check. Over time, checking that size tilts don’t drift too far is a useful discipline.

Redundant positions Info

  • Lyxor Core MSCI World (DR) UCITS ETF
    Vanguard FTSE All-World UCITS ETF USD Accumulation
    High correlation

The broad global ETFs in this portfolio, particularly the MSCI World and All-World funds, are highly correlated, meaning they move very similarly most of the time. Correlation is just a measure of how often assets go up or down together; when it’s high, owning both adds less true diversification. This portfolio’s diversification score is still strong, but removing overlapping funds could simplify things without sacrificing much. A practical next step could be to pick one main global “core” ETF and reduce the other over time, especially when rebalancing, to keep the structure clean and avoid paying ongoing costs for near-duplicate exposure.

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.

Using the Efficient Frontier framework, which looks for the best possible trade-off between risk and return given a set of assets, this mix could be streamlined. Efficiency here doesn’t mean “perfect diversification” but rather “most expected return for a chosen level of volatility.” Because some ETFs overlap heavily, they don’t add much to that trade-off. The portfolio already sits in a relatively attractive zone, with strong historical returns for moderate drawdowns, which is encouraging. To nudge it closer to the frontier, focusing on one or two broad global core funds and then adding a few clearly distinct satellites can keep the structure tight while preserving the overall growth profile.

Ongoing product costs Info

  • Amundi MSCI Emerging Ex China UCITS ETF Acc 0.15%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) EUR 0.35%
  • Lyxor Core MSCI World (DR) UCITS ETF 0.12%
  • iShares MSCI Europe ESG Screened UCITS ETF 0.12%
  • iShares Core MSCI Pac ex-Jpn ETF USD Acc 0.20%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.19%
  • Weighted costs total (per year) 0.15%

The average ongoing cost of about 0.15% per year is impressively low for a diversified global equity mix. That aligns closely with best practices and supports better long-term outcomes, because every fraction of a percent saved in fees can compound into a large difference over decades. The only slightly higher-cost piece is the small-cap ETF, which is normal for that segment and still reasonable. Overall, this fee level compares very favourably with many active funds and even some other ETFs. A sensible habit is to recheck expense ratios occasionally and, if new cheaper options appear with similar exposure, consider gradual switches while being mindful of any tax impacts.

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