A cautious portfolio with a focus on healthcare and moderate geographic diversification

Report created on Mar 4, 2025

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Cautious Investors

This portfolio suits an investor with a cautious risk tolerance, prioritizing stability and moderate growth. With a focus on healthcare and developed markets, it aligns with a long-term investment horizon, seeking to preserve capital while capturing growth opportunities. The limited exposure to emerging markets and small-cap stocks reflects a preference for lower volatility and steady returns. This approach is ideal for individuals looking to build wealth gradually, balancing risk and reward. Regular monitoring and adjustments can help maintain this alignment and achieve investment goals over time.

Positions

This portfolio is predominantly composed of ETFs, with a significant allocation to the healthcare sector through the Xtrackers MSCI World Health Care UCITS ETF, which comprises 40% of the total. The remaining allocations include the iShares Core S&P 500 ETF at 24.75%, VanEck Uranium and Nuclear Technologies ETF at 21.55%, and Amundi Stoxx Europe 600 ETF at 13.7%. This composition suggests a focus on developed markets and sector-specific strategies. A comparison with a typical benchmark reveals a higher concentration in healthcare, which may influence risk and return characteristics. For a cautious investor, this allocation provides a balance between growth potential and defensive positioning.

Growth Info

Historically, the portfolio has delivered a compound annual growth rate (CAGR) of 15.71%, indicating strong past performance. The maximum drawdown of -9.24% suggests relatively limited downside risk, aligning with the cautious risk profile. Comparatively, this performance exceeds typical benchmarks, reflecting the portfolio's strategic sector and geographic allocations. However, it's important to remember that past performance does not guarantee future results. For cautious investors, maintaining awareness of market conditions and periodically reviewing the portfolio can help sustain performance while managing risk.

Projection Info

The Monte Carlo simulation, which uses historical data to model potential future outcomes, projects an annualized return of 18.48% across 1,000 simulations. While this suggests promising growth potential, it's crucial to note that simulations are based on past data and assumptions, which may not fully capture future market dynamics. The range of potential outcomes, with a 5th percentile return of 234.2% and a 67th percentile return of 1,116.5%, highlights the inherent uncertainty in projections. Regularly reassessing assumptions and adjusting the portfolio as needed can help manage expectations and align with investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio is solely invested in stocks, with no allocation to other asset classes like bonds or cash. This 100% equity exposure can lead to higher volatility, which may not fully align with a cautious risk profile. While equities offer growth potential, introducing other asset classes could enhance diversification and reduce overall risk. Comparing this allocation to typical benchmarks, which often include bonds for stability, highlights an opportunity to balance risk and return more effectively. Diversifying into multiple asset classes can provide a more stable investment experience, particularly during market downturns.

Sectors Info

  • Health Care
    45%
  • Industrials
    16%
  • Energy
    10%
  • Technology
    9%
  • Financials
    6%
  • Consumer Discretionary
    4%
  • Telecommunications
    3%
  • Consumer Staples
    3%
  • Utilities
    2%
  • Basic Materials
    1%
  • Real Estate
    1%

Sector-wise, the portfolio is heavily weighted towards healthcare, making up 45% of the total allocation. This is significantly higher than typical benchmarks, which may lead to increased sector-specific risk. The remaining sectors include industrials, energy, and technology, each contributing to diversification. However, a healthcare-heavy allocation could result in heightened volatility during sector downturns or regulatory changes. Balancing sector allocations more evenly can provide resilience against sector-specific risks and align with a cautious investment approach. Regularly reviewing sector performance and trends can help optimize this balance.

Regions Info

  • North America
    67%
  • Europe Developed
    23%
  • Japan
    7%
  • Asia Developed
    2%
  • Australasia
    2%

Geographically, the portfolio is concentrated in North America, comprising 67% of the allocation, followed by Europe at 23%. This focus on developed markets provides stability but limits exposure to emerging markets, which can offer growth opportunities. Compared to typical benchmarks, this geographic allocation is more conservative, aligning with a cautious risk profile. However, increasing exposure to emerging markets could enhance diversification and capture potential growth. Regularly evaluating geographic risks and opportunities can help optimize the portfolio's global balance and align with long-term investment goals.

Market capitalization Info

  • Large-cap
    39%
  • Mega-cap
    34%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization distribution is skewed towards large-cap stocks, with 39% in big caps and 34% in mega caps. This focus provides stability and lower volatility, aligning with a cautious risk profile. However, the limited exposure to small and micro caps, at 5% and 2% respectively, reduces potential growth opportunities. Compared to typical benchmarks, this allocation is conservative. Introducing more small-cap exposure could enhance growth potential while maintaining a balanced risk profile. Regularly reviewing market cap allocations can help optimize the portfolio's risk-return balance.

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 potentially be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio for a given set of assets. This involves adjusting the allocation between current assets to achieve the highest return for a given level of risk. While this optimization focuses on risk and return, it doesn't necessarily address diversification or other goals. For cautious investors, ensuring that the portfolio aligns with personal risk tolerance and investment objectives is crucial. Regularly reviewing and rebalancing the portfolio can help maintain this optimal balance.

Ongoing product costs Info

  • Amundi Stoxx Europe 600 UCITS ETF C EUR 0.07%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Xtrackers MSCI World Health Care UCITS ETF 1C 0.25%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, which is impressively low and supports better long-term performance. This cost efficiency aligns well with the cautious risk profile, as lower fees can enhance net returns over time. Compared to typical benchmarks, this cost structure is competitive, allowing for more of the investment to compound. Maintaining a focus on cost-effective investments can continue to support portfolio growth. Regularly reviewing fund expenses and seeking low-cost alternatives can further optimize the portfolio's cost structure, maximizing returns for cautious investors.

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