A balanced global portfolio with an emphasis on momentum and all-world 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

The portfolio consists of two equally weighted ETFs: the iShares MSCI World Momentum Factor UCITS and the Vanguard FTSE All-World UCITS ETF. This composition results in a balanced exposure to global equities, focusing on momentum stocks and a broad market index. Compared to common benchmarks, this allocation provides a diversified approach but is heavily reliant on equity performance. For investors seeking a more diversified asset base, incorporating other asset classes like bonds or real estate could add stability and reduce volatility.

Growth Info

The portfolio's historical performance is impressive, with a Compound Annual Growth Rate (CAGR) of 13.42%. However, it experienced a significant maximum drawdown of -32.04%, indicating vulnerability during market downturns. This performance is in line with equity-heavy portfolios, which tend to offer high returns but with increased risk. To mitigate large drawdowns, consider diversifying into less volatile assets, though this may slightly reduce the potential for high returns.

Projection Info

Forward projections using Monte Carlo simulations suggest a promising outlook, with an annualized return of 14.34%. However, these projections are based on historical data and may not predict future performance accurately. The simulations show a wide range of potential outcomes, highlighting the inherent uncertainty in market conditions. While optimistic, investors should remain cautious and not solely rely on these projections, considering potential market shifts and economic changes.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly invested in stocks, with a negligible allocation to cash, bonds, and other classes. This heavy stock concentration aligns with a growth-focused strategy but lacks diversification benefits. Compared to typical benchmarks, this allocation is aggressive, potentially leading to higher volatility. To enhance stability, consider adding bonds or other asset classes, which can provide a cushion during market downturns and contribute to a more balanced risk-return profile.

Sectors Info

  • Technology
    26%
  • Financials
    20%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Discretionary
    8%
  • Consumer Staples
    7%
  • Utilities
    4%
  • Energy
    3%
  • Real Estate
    3%
  • Basic Materials
    2%

Sector allocation is diversified, with significant exposure to technology (25.93%) and financial services (19.55%). This distribution aligns with global market trends but may be susceptible to sector-specific risks, such as regulatory changes in tech or financial crises. Compared to benchmarks, the sector exposure is balanced, though a slight overemphasis on technology could lead to increased volatility. Regularly reviewing sector weights and adjusting for emerging trends can help maintain a balanced risk profile.

Regions Info

  • North America
    74%
  • Europe Developed
    12%
  • Japan
    5%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    2%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America (74.01%), with limited exposure to other regions. This concentration aligns with benchmarks but may expose the portfolio to regional economic risks. A more globally diversified approach could reduce dependence on North America and increase resilience against localized downturns. Consider gradually increasing exposure to underrepresented regions like Europe or Asia to enhance geographic 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.

The portfolio can be optimized along the Efficient Frontier by adjusting asset weights to achieve a better risk-return ratio. This optimization involves reallocating current assets, not necessarily adding new ones, to enhance efficiency. By focusing on the best possible risk-return balance, investors can potentially increase returns without significantly increasing risk. Regularly reviewing and adjusting the portfolio can ensure it remains aligned with changing market conditions and investment goals.

Dividends Info

  • Vanguard FTSE All-World UCITS ETF 0.90%
  • Weighted yield (per year) 0.45%

With a total dividend yield of 0.45%, the portfolio offers moderate income potential. The Vanguard FTSE All-World UCITS ETF contributes a 0.9% yield, providing some cash flow. This yield is modest compared to income-focused portfolios, reflecting the growth-oriented nature of the current allocation. For investors seeking higher income, consider adding dividend-focused ETFs or stocks, which can provide more consistent returns and enhance portfolio cash flow.

Ongoing product costs Info

  • iShares MSCI World Momentum Factor UCITS 0.30%
  • Vanguard FTSE All-World UCITS ETF 0.22%
  • Weighted costs total (per year) 0.26%

The total expense ratio (TER) of 0.26% is relatively low, supporting better long-term performance by minimizing costs. This efficiency is a positive aspect, as high fees can erode returns over time. Compared to similar portfolios, the costs are competitive, ensuring that more of the investment returns are retained. Continuously monitoring and comparing fund fees can help maintain this cost advantage, contributing to improved net returns.

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