Globally diversified all stock portfolio with strong risk control and low ongoing investment costs
Report created on Apr 29, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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EU iShares Core MSCI World UCITS ETF USD (Acc) EUR
EUNL - IE00B4L5Y983 60.00% -
IS iShares Core MSCI Emerging Markets IMI UCITS
IS3N - IE00BKM4GZ66 40.00%
The portfolio is very simple and very focused: two broad stock ETFs, roughly 60% in developed markets and 40% in emerging markets. Everything is in equities, with no bonds or alternatives, so it fully embraces stock-market risk to pursue long-term growth. This kind of structure is easy to understand and maintain, which helps many investors stick with their plan through market ups and downs. The key implication is that short‑term swings can be significant, but long‑term return potential is strong. For someone who accepts equity volatility and wants global exposure without complexity, this straightforward 60/40 developed–emerging split is a solid, disciplined approach.
Growth
Historically, $1,000 grew to about $2,647 over ten years, a compound annual growth rate (CAGR) of 10.14%. CAGR is like the average yearly “speed” of your money over that whole period. This trailed both the US market and the global market, which delivered higher CAGRs, but the gap versus global was modest. The max drawdown of about -33% is in line with broad equities, so downside risk has been typical for an all‑stock allocation. The main takeaway is that you’ve received decent global‑style equity growth, with normal stock‑market pain during crashes, but not unusually severe damage versus large benchmarks.
Asset classes
- Stocks 100%
All capital is in equities, with 0% in bonds, cash, or other asset classes. That makes the portfolio aggressive from an asset‑class perspective, even though the risk score labels it “balanced” in a model context. Pure stock portfolios historically offer higher long‑term returns but can experience deep drawdowns and multi‑year flat periods. The upside of this all‑equity stance is simplicity and growth potential; the downside is relying entirely on stock markets for both returns and stability. Investors who want smoother rides usually blend in bonds or cash, but that also lowers expected returns. The choice ultimately depends on tolerance for volatility and need for short‑term liquidity.
Sectors
- Technology 29%
- Financials 17%
- Industrials 10%
- Consumer Discretionary 10%
- Telecommunications 8%
- Health Care 7%
- Basic Materials 5%
- Consumer Staples 5%
- Energy 4%
- Utilities 3%
- Real Estate 2%
Sector exposure is quite spread out, with technology at 29% and no other sector dominating. Financials, industrials, and consumer‑related areas together build a broad economic footprint, while more defensive segments like health care and utilities also appear. This kind of sector mix is similar to global equity benchmarks, which is a strong indicator of healthy diversification. The tech overweight versus an equal‑sector world can add growth but may amplify sensitivity to interest rates and innovation cycles. The key benefit here is that you are not overly tied to any single economic theme; if one sector lags for several years, others can help cushion the blow.
Regions
- North America 45%
- Asia Developed 17%
- Asia Emerging 16%
- Europe Developed 10%
- Japan 4%
- Africa/Middle East 4%
- Latin America 3%
- Australasia 1%
- Europe Emerging 1%
Geographically, the allocation is nicely global: a significant share in North America, meaningful stakes across developed and emerging Asia, and diversified exposure to Europe, Latin America, and smaller regions. This allocation is closer to a true world market than many portfolios that heavily favor one country. That alignment with global standards is beneficial because it reduces reliance on the fortunes of a single economy or currency. If one region experiences recession, policy shocks, or structural stagnation, other areas may still grow robustly. The trade‑off is that during stretches when one country, like the US, dramatically outperforms, a globally balanced stance will naturally lag that single market.
Market capitalization
- Mega-cap 50%
- Large-cap 32%
- Mid-cap 15%
- Small-cap 2%
Market‑cap exposure is tilted toward mega‑caps and large‑caps, which together make up over 80% of the portfolio, with modest mid‑cap and small‑cap representation. This structure mirrors broad global indices, where the largest companies dominate total market value. Larger firms often provide more stability, deeper liquidity, and better access to capital, which can help during stress periods. However, smaller companies have historically offered higher long‑run return potential, albeit with more volatility. Your current mix keeps risk and behavior close to mainstream global benchmarks, which aids predictability. Anyone seeking stronger small‑cap growth potential would need a deliberate tilt rather than relying on these broad exposures alone.
True holdings
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23 Taiwan Semiconductor Manufacturing Co. Ltd. 4.65%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
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NV NVIDIA Corporation 3.03%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AA Apple Inc 2.73%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
00 Samsung Electronics Co Ltd 2.10%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
MS Microsoft Corporation 1.95%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AM Amazon.com Inc 1.42%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
GO Alphabet Inc Class A 1.28%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
07 Tencent Holdings Ltd 1.25%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
00 SK Hynix Inc 1.19%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
GO Alphabet Inc Class C 1.07%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
- Top 10 total 20.65%
Looking through the ETFs, the largest indirect exposures include big technology and semiconductor names plus a few major Asian and US platforms. Several companies appear via multiple ETFs, which quietly boosts concentration in those giants even if they look like small positions individually. Because only top‑10 ETF holdings are captured, real overlap is likely higher than shown. This is not necessarily a problem: broad global funds will always lean toward the world’s largest, most liquid companies. The useful insight is simply to recognize that a “two‑ETF” portfolio can still be quite dependent on a handful of mega‑caps, especially in tech and communication areas.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows a notable tilt toward value and especially toward low volatility. Factors are like underlying “personality traits” of stocks—value, size, momentum, quality, yield, and low volatility—that research links to long‑term returns. A high low‑volatility tilt suggests the holdings lean toward relatively steadier companies that historically swing less than the market. This can soften drawdowns but may lag during roaring bull markets led by speculative names. The elevated value tilt suggests a preference for stocks priced more cheaply relative to fundamentals, which can shine after periods when expensive growth names cool off. Overall, this combination tends to favor resilience and valuation discipline over pure momentum chasing.
Risk contribution
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iShares Core MSCI World UCITS ETF USD (Acc) EUR
Weight: 60.00% 56.9% -
iShares Core MSCI Emerging Markets IMI UCITS
Weight: 40.00% 43.1%
Risk contribution shows how much each holding drives the portfolio’s ups and downs, which can differ from simple weights. Here, the developed‑markets ETF contributes slightly less risk than its weight, while the emerging‑markets ETF contributes slightly more. That’s normal: emerging markets generally fluctuate more, so each dollar there adds extra volatility. This insight is useful because a 40% allocation to emerging markets in weight translates into a larger share of total risk. Adjusting the balance between the two ETFs—without changing anything else—would directly dial overall volatility up or down. Aligning these risk contributions with your comfort level is often more important than fine‑tuning tiny positions.
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.
On the risk–return chart, the current allocation sits below the efficient frontier, meaning it’s not using its holdings in the most effective weights. The efficient frontier represents the best possible return for each risk level using only your existing ETFs, while the Sharpe ratio measures return per unit of volatility. Here, the optimal and minimum‑variance mixes offer higher Sharpe ratios at nearly the same risk, with expected returns over 11–12% versus 10.9%. That suggests a simple reweighting between the two ETFs could improve risk‑adjusted performance without adding new products. This is a positive finding: the building blocks are strong, and only the balance between them might need tuning.
Ongoing product costs
- iShares Core MSCI World UCITS ETF USD (Acc) EUR 0.20%
- iShares Core MSCI Emerging Markets IMI UCITS 0.18%
- Weighted costs total (per year) 0.19%
Total ongoing costs are impressively low at about 0.19% per year. The Total Expense Ratio (TER) is like a tiny annual “membership fee” charged by the funds, quietly deducted from returns. Keeping this number low is one of the most reliable ways to improve long‑term outcomes because fees compound just like returns—only in the wrong direction. This cost level is well below many active or more complex products and aligns with best practices for long‑term investing. Over decades, the difference between 0.2% and, say, 1% annually can add up to many thousands of dollars kept in your own pocket rather than paid out to managers.
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