A well-diversified global equity portfolio with a balanced risk profile and a focus on major sectors

Report created on Jul 20, 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 evenly split across three major global ETFs, ensuring a broad exposure to the world's equity markets. The allocation includes a global ETF, a small-cap world ETF, and a specific focus on the S&P 500, providing a mix of geographical and market capitalization exposure. This strategy spreads risk and opportunity across different segments of the global market, aligning with a balanced risk profile. However, the equal weighting may overlook the potential benefits of strategic weighting based on market conditions or future growth prospects.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.72%, with a maximum drawdown of -35.72%. These figures suggest a resilient performance through market cycles, with significant recovery from the lowest points. The days contributing most to returns highlight the portfolio's sensitivity to market surges. While past performance is a useful indicator, it's crucial to remember it doesn't guarantee future results. Comparing these metrics to benchmark indices could provide further insight into relative performance.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. While the median projected increase is substantial, it's important to note these simulations assume past market behavior will predict future outcomes, which is not always the case. The high percentage of simulations with positive returns suggests resilience, but investors should be prepared for variability and understand the limitations of predictive models.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, which positions it for potential growth but also exposes it to market volatility. While this aligns with a balanced risk profile willing to accept moderate fluctuations for higher returns, the absence of other asset classes like bonds or real estate might limit opportunities for risk mitigation during downturns. Incorporating a variety of asset classes could enhance the portfolio's ability to withstand volatile markets.

Sectors Info

  • Technology
    24%
  • Financials
    16%
  • Industrials
    13%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Real Estate
    4%
  • Basic Materials
    4%
  • Energy
    4%
  • Utilities
    3%

With a significant allocation to technology and financial services, followed by industrials and consumer cyclicals, the portfolio is positioned to benefit from growth in these sectors. However, the heavy concentration in technology could expose the portfolio to sector-specific risks, such as regulatory changes or market sentiment shifts. Diversifying across a wider range of sectors could reduce this risk while still capturing growth opportunities.

Regions Info

  • North America
    76%
  • Europe Developed
    11%
  • Japan
    6%
  • Asia Emerging
    2%
  • Australasia
    2%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic allocation is heavily weighted towards North America, with limited exposure to emerging markets and other developed regions. This concentration enhances exposure to the robust U.S. economy and its large-cap companies but may miss out on potential growth opportunities in emerging markets and other developed regions. Expanding geographic diversity could capture global growth trends and reduce regional risk.

Market capitalization Info

  • Mega-cap
    31%
  • Large-cap
    24%
  • Mid-cap
    23%
  • Small-cap
    17%
  • Micro-cap
    4%

The balanced distribution across mega, big, medium, small, and micro-cap stocks suggests a strategy designed to capture growth across the market cap spectrum. This diversification can help mitigate the risk associated with size-specific market movements. However, the portfolio might benefit from a more dynamic allocation strategy that adjusts to changing market conditions and opportunities.

Redundant positions Info

  • iShares Core S&P 500 UCITS ETF USD (Acc)
    Vanguard FTSE All-World UCITS ETF USD Accumulation
    High correlation

The high correlation between the S&P 500 and the global ETF indicates overlapping exposures, which may limit diversification benefits. While these ETFs provide broad market access, their similarity in holdings could amplify risks during market downturns. Identifying and reducing overlap could enhance the portfolio's risk-adjusted returns by ensuring each investment contributes uniquely to diversification.

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.

Optimizing the portfolio involves addressing the high correlation between holdings to improve diversification. The current setup shows potential for enhanced returns at the same risk level, suggesting that a more efficient allocation could yield a 14.44% expected return. This optimization process emphasizes the importance of not just diversification by numbers but also ensuring that each component of the portfolio contributes uniquely to its risk and return profile.

Ongoing product costs Info

  • iShares MSCI World Small Cap UCITS ETF USD (Acc) EUR 0.35%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.23%

The portfolio's average Total Expense Ratio (TER) of 0.23% is relatively low, which is beneficial for long-term growth as it minimizes the drag on returns caused by fees. Keeping costs low is a critical component of successful investing, especially in a solely equity-based portfolio where the impact of fees can compound over time. Continual monitoring of fees and adjusting to lower-cost options when available can enhance net returns.

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