A globally diversified ETF portfolio with a focus on technology and mega-cap stocks

Report created on Feb 12, 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 consists entirely of the Vanguard FTSE All-World UCITS ETF USD Accumulation, representing a single ETF with broad global exposure. This ETF provides access to a wide range of stocks across various regions and sectors, making it a comprehensive investment vehicle. Compared to a typical balanced portfolio, this single-ETF approach offers simplicity and ease of management. However, it lacks the flexibility to adjust allocations to specific asset classes or sectors. While the ETF's broad diversification aligns well with a balanced risk profile, incorporating additional asset classes could enhance flexibility and adaptability to changing market conditions.

Growth Info

The historical performance of this portfolio is impressive, with a CAGR of 13.21%. This indicates strong growth over time, far exceeding typical savings account returns. However, it's important to note the maximum drawdown of -33.45%, which highlights potential volatility. This level of drawdown suggests that while the portfolio has delivered significant returns, it has also experienced substantial declines during market downturns. Comparing this to benchmarks, the performance is competitive, but the volatility should be considered when assessing risk tolerance. Investors should prepare for potential fluctuations in value, especially during economic uncertainty.

Projection Info

Using Monte Carlo simulations, the portfolio's forward projections suggest a median growth of 457.7% over the simulation period, with a 5th percentile outcome of 90.4% and a 67th percentile outcome of 637.2%. Monte Carlo simulations use historical data to model potential future outcomes, providing a range of possibilities rather than a single prediction. While the results are promising, it's crucial to remember that these projections are not guarantees. They offer insights into possible scenarios but depend heavily on past data, which may not reflect future market conditions. Investors should remain cautious and consider these projections as one of many tools in decision-making.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, which aligns with its goal of capital appreciation. This single asset class focus can lead to higher returns but also comes with increased volatility. Compared to a diversified portfolio that includes bonds or other asset classes, this approach may lack stability in turbulent markets. While stocks have historically outperformed other asset classes over the long term, incorporating bonds or alternative investments could provide a buffer against market swings. Diversifying into other asset classes might enhance risk-adjusted returns and offer more consistent performance.

Sectors Info

  • Technology
    27%
  • Financials
    17%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation within this ETF shows a significant concentration in technology at 27%, followed by financial services and consumer cyclicals. This tech-heavy focus can drive growth, especially during periods of technological advancement. However, it also exposes the portfolio to higher volatility, particularly during interest rate hikes or tech sector downturns. Compared to common benchmarks, the sector distribution is broadly aligned, but the technology tilt is notable. Investors should be aware of sector-specific risks and consider whether this concentration aligns with their risk tolerance and investment goals.

Regions Info

  • North America
    67%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic exposure of this portfolio is heavily weighted towards North America at 67%, with notable allocations in Europe and Asia. This distribution reflects a focus on developed markets, which may offer stability and growth potential. However, the limited exposure to emerging markets could mean missing out on higher growth opportunities in those regions. Compared to typical global benchmarks, the North American concentration is significant. Investors seeking broader diversification might explore increasing exposure to underrepresented regions like Latin America or Africa, which could enhance growth prospects and reduce reliance on a single geographic area.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    35%
  • Mid-cap
    17%

The portfolio's market capitalization breakdown shows a strong emphasis on mega-cap stocks at 47%, followed by big and medium caps. This skew towards larger companies can provide stability and lower volatility, as mega-cap stocks are often established market leaders. However, it may limit exposure to the potentially higher growth of smaller companies. Compared to a more evenly distributed market cap allocation, this focus may offer less opportunity for capital appreciation from smaller, innovative firms. Investors might consider diversifying into small or micro-cap stocks to capture growth potential and balance the portfolio's risk-reward profile.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.22%. This cost efficiency supports better long-term performance by minimizing the drag on returns. Compared to actively managed funds, which often have higher fees, this ETF offers a cost-effective way to gain broad market exposure. Keeping costs low is crucial for maximizing net returns, as even small fee differences can compound significantly over time. Investors should continue to monitor expense ratios and consider cost-effective options to ensure their investments are working as efficiently as possible.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey