A balanced portfolio with strong North American focus and significant financial sector exposure

Report created on Jan 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of the SPDR MSCI ACWI IMI UCITS ETF and Berkshire Hathaway Inc., with a nearly even split. The ETF provides global exposure, while Berkshire Hathaway is a large-cap stock. This combination offers a mix of diversification and concentration. The overall composition leans heavily toward equities, which is typical for a balanced profile. Compared to common benchmarks, the portfolio is slightly concentrated, particularly in a single stock, which may impact diversification.

Growth Info

Historically, this portfolio has demonstrated a commendable CAGR of 13.68%, indicating strong growth over time. However, it also experienced a significant maximum drawdown of -31.83%, reflecting vulnerability during market downturns. Comparing this to benchmarks, the growth is impressive, but the volatility is also notable. It's crucial to consider both aspects when evaluating past performance. Despite the drawdown, the portfolio's returns have been achieved in just 34 days, highlighting its potential for rapid gains during favorable periods.

Projection Info

Using Monte Carlo simulations, this portfolio's future performance was projected with 1,000 scenarios. The median outcome suggests a potential 452.67% return, with the majority of simulations yielding positive results. While this offers a promising outlook, it's important to remember that these simulations rely on historical data, which cannot predict future events. The range of outcomes, from 79.81% at the 5th percentile to 649.36% at the 67th, illustrates the inherent uncertainty and variability in projections.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly weighted toward stocks, comprising nearly 100% of the total allocation. This heavy equity focus aligns with a balanced risk profile but may limit diversification benefits typically gained from other asset classes like bonds or real estate. Compared to benchmarks, this allocation is aggressive and may expose the portfolio to higher volatility. Consider diversifying into additional asset classes to potentially stabilize returns and reduce risk.

Sectors Info

  • Financials
    56%
  • Technology
    13%
  • Industrials
    6%
  • Consumer Discretionary
    6%
  • Health Care
    6%
  • Telecommunications
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    1%

Financial services dominate the sector allocation, making up over half of the portfolio. This concentration can lead to heightened sensitivity to economic cycles and regulatory changes affecting the financial industry. While technology and industrials provide some diversification, the overall sector balance is skewed. A more evenly distributed sector allocation could mitigate risks associated with sector-specific downturns and enhance portfolio resilience.

Regions Info

  • North America
    82%
  • Europe Developed
    8%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, this portfolio is heavily skewed towards North America, accounting for over 82% of the allocation. While this provides exposure to a stable and mature market, it limits diversification across other regions. The underweight positions in Europe, Asia, and emerging markets could miss out on potential growth opportunities. A more balanced geographic distribution could enhance diversification and reduce regional risk.

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.

This portfolio could benefit from optimization along the Efficient Frontier, which seeks the best possible risk-return ratio. Currently, the concentration in equities and a single stock limits potential efficiency. Adjusting the allocation to include a broader range of assets could improve this balance. The Efficient Frontier helps identify the most efficient portfolio based on current holdings, but it doesn't guarantee future performance improvements.

Ongoing product costs Info

  • SSgA SPDR ETFs Europe I Public Limited Company - SPDR MSCI ACWI IMI UCITS ETF 0.40%
  • Weighted costs total (per year) 0.21%

The ETF's Total Expense Ratio (TER) of 0.4% is relatively moderate, supporting cost-effective exposure to global equities. Keeping costs low is crucial for long-term performance, as high fees can erode returns. The current cost structure is competitive, aligning well with best practices for maintaining net returns. Regularly reviewing and optimizing costs can further enhance the portfolio's efficiency.

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