Balanced portfolio with strong US focus and moderate emerging markets exposure

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

Balanced Investors

This portfolio suits an investor with a balanced risk tolerance, seeking moderate growth with some exposure to alternative assets like Bitcoin. It is ideal for those with a medium to long-term investment horizon, aiming to capitalize on equity market growth while maintaining diversification across sectors and geographies. The emphasis on US equities and emerging markets appeals to investors looking to harness global economic trends. This portfolio is well-suited for individuals comfortable with market fluctuations and seeking a blend of growth and stability.

Positions

  • iShares Core S&P 500 UCITS ETF USD (Acc)
    SXR8 - IE00B5BMR087
    40.00%
  • iShares Core MSCI Emerging Markets IMI UCITS
    IS3N - IE00BKM4GZ66
    30.00%
  • VanEck Vectors ETFs N.V. - VanEck Vectors Global Real Estate UCITS ETF
    TRET - NL0009690239
    25.00%
  • CoinShares Physical Bitcoin (BTC) EUR
    BITC - GB00BLD4ZL17
    5.00%

The portfolio is composed of ETFs, with a significant 40% allocation to the iShares Core S&P 500 ETF, indicating a strong focus on US equities. The iShares Core MSCI Emerging Markets ETF, at 30%, provides exposure to emerging markets, while the VanEck Vectors Global Real Estate ETF, at 25%, adds diversification through real estate. A small 5% allocation to CoinShares Physical Bitcoin introduces cryptocurrency exposure. This composition suggests a balanced approach, blending traditional equities with alternative assets. Such a structure is common for investors seeking broad diversification while maintaining a focus on growth.

Growth Info

Historically, the portfolio has achieved a CAGR of 8.67%, which is commendable and aligns with moderate growth expectations. The maximum drawdown of -20.58% indicates exposure to market volatility, typical for equity-heavy portfolios. When compared to benchmarks, this performance suggests a healthy balance between risk and return. Investors should be aware that past performance doesn't guarantee future success, but it can provide a sense of how the portfolio might behave under similar conditions. Maintaining this performance requires regular rebalancing and monitoring of market conditions.

Projection Info

The Monte Carlo simulation, using 1,000 iterations, projects a wide range of potential outcomes, with the 5th percentile showing a -38.3% return and the 67th percentile a 565.2% return. This simulation uses historical data to estimate future performance, highlighting the uncertainty and potential volatility inherent in the portfolio. It's important to note that these projections are not guarantees but can help set realistic expectations. Investors might consider adjusting allocations to align with their risk tolerance and long-term goals, as projections can vary significantly.

Asset classes Info

  • Stocks
    95%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

With 95% of assets in stocks, the portfolio is heavily tilted towards equities, which can drive growth but also increase volatility. This high equity allocation aligns with a strategy focused on capital appreciation. While the lack of cash or other asset classes might limit liquidity, the broad diversification within equities helps mitigate some risks. Investors should consider whether this allocation matches their risk tolerance, as a more balanced mix could provide stability during market downturns.

Sectors Info

  • Real Estate
    27%
  • Technology
    20%
  • Financials
    12%
  • Consumer Discretionary
    8%
  • Telecommunications
    7%
  • Health Care
    5%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%

The portfolio's sector allocation includes a notable 27% in real estate, followed by 20% in technology, which are both growth-oriented. This sectoral focus can lead to higher volatility, particularly in tech-heavy markets. While this allocation provides exposure to sectors with strong growth potential, it may also increase sensitivity to economic cycles. Investors should consider whether this concentration aligns with their risk appetite and long-term objectives, potentially rebalancing if sector trends shift.

Regions Info

  • North America
    58%
  • Asia Emerging
    15%
  • Asia Developed
    10%
  • Europe Developed
    3%
  • Africa/Middle East
    3%
  • Japan
    3%
  • Latin America
    2%
  • Australasia
    1%
  • Europe Emerging
    1%

Geographically, the portfolio is heavily weighted towards North America at 58%, with emerging Asia at 15%. This geographic concentration aligns with common benchmarks but may expose the portfolio to regional risks. The limited exposure to Europe and other regions could impact diversification. Investors might consider increasing geographic diversity to reduce potential risks associated with regional economic downturns or geopolitical events, ensuring a more balanced global exposure.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    30%
  • Mid-cap
    27%
  • Small-cap
    4%
  • Micro-cap
    0%

The portfolio's market capitalization is well-distributed, with 34% in mega-cap and 30% in big-cap stocks. This distribution provides a mix of stability and growth potential, as larger companies tend to be more stable, while smaller ones might offer higher growth. However, the limited exposure to small and micro-cap stocks could reduce the potential for outsized gains. Investors may want to assess whether this distribution aligns with their growth objectives, possibly increasing smaller-cap exposure for diversification.

Dividends Info

  • VanEck Vectors ETFs N.V. - VanEck Vectors Global Real Estate UCITS ETF 2.80%
  • Weighted yield (per year) 0.70%

The portfolio's overall dividend yield is 0.70%, with the VanEck Vectors Global Real Estate ETF contributing a 2.80% yield. This suggests a focus on growth rather than income. While dividends can provide a steady income stream, their relatively low contribution here indicates the portfolio's emphasis on capital appreciation. Investors seeking income might consider increasing exposure to higher-yielding assets, though this could alter the risk-return profile.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • VanEck Vectors ETFs N.V. - VanEck Vectors Global Real Estate UCITS ETF 0.25%
  • Weighted costs total (per year) 0.16%

With a total expense ratio (TER) of 0.16%, the portfolio is cost-efficient, supporting better long-term performance. Low costs are crucial as they can significantly impact net returns over time. The iShares Core S&P 500 ETF's TER of 0.12% is particularly competitive. Investors should continue to monitor costs, ensuring they remain low as the portfolio evolves. This cost efficiency is a positive aspect, aligning with best practices for maximizing investment returns.

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.

The portfolio can potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This optimization involves reallocating existing assets to improve performance without adding new ones. While the current allocation is fairly balanced, exploring the Efficient Frontier could reveal opportunities for enhancing returns or reducing risk. Investors should consider whether adjustments align with their goals, understanding that optimization focuses on maximizing efficiency rather than diversification.

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