A well-rounded global portfolio with a cautious approach to risk and a focus on diversification

Report created on May 11, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is structured with a 50% allocation to the Vanguard FTSE All-World UCITS ETF, 20% each in the Vanguard FTSE All-World High Dividend Yield UCITS ETF and the iShares Global Aggregate Bond UCITS ETF, and a 10% allocation to the iShares MSCI World Small Cap UCITS ETF. This composition underscores a strategic blend of global equities and bonds, aiming for growth while maintaining a buffer against market volatility through bonds. The emphasis on diversified ETFs across various sectors and geographies, combined with a cautious risk profile, suggests a balanced approach to achieving long-term growth with moderated risk exposure.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 7.67%, with a maximum drawdown of -23.03%. This performance indicates a relatively stable growth trajectory, albeit with periods of significant value decline. The days contributing to 90% of returns being concentrated in just 14.0 days highlight the impact of short-term market movements on overall performance. Comparing this to benchmarks in similar risk categories can provide insight into its relative resilience and growth potential over time.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes for this portfolio. At the 50th percentile, an expected growth of 129.5% is observed, with a more optimistic 205.4% growth at the 67th percentile. However, it's crucial to note that these projections are based on past trends and cannot guarantee future returns. The simulations indicate a high likelihood of positive returns (888 out of 1,000 scenarios), supporting the portfolio's cautious yet growth-oriented strategy.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%

The asset allocation leans heavily towards stocks (80%) with a 20% commitment to bonds. This ratio supports a growth-focused strategy while incorporating bonds to mitigate risk and volatility. The absence of alternative asset classes like real estate or commodities suggests a preference for traditional investments, which may limit exposure to potentially higher-risk, higher-reward opportunities. Balancing traditional assets with alternatives could enhance diversification and potentially improve risk-adjusted returns.

Sectors Info

  • Financials
    16%
  • Technology
    15%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Discretionary
    8%
  • Consumer Staples
    6%
  • Telecommunications
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sectoral allocation shows a balanced exposure with significant investments in Financial Services (16%) and Technology (15%), followed by Industrials, Healthcare, and Consumer Cyclicals. This distribution reflects a strategic emphasis on sectors that offer growth potential and stability. However, the portfolio might benefit from reevaluating sector weights periodically to adapt to changing market conditions and opportunities, ensuring that exposure aligns with global economic trends and sectoral growth prospects.

Regions Info

  • North America
    48%
  • Europe Developed
    14%
  • Japan
    6%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic distribution is predominantly focused on North America (48%), with meaningful allocations to Europe Developed and emerging markets. This geographic spread supports diversification, reducing the portfolio's vulnerability to region-specific economic downturns. However, the relatively low exposure to emerging markets and Asia Developed regions may limit potential growth from these high-growth areas. Considering a slight increase in allocation to these regions could enhance returns while maintaining a balanced risk profile.

Market capitalization Info

  • Mega-cap
    31%
  • Large-cap
    26%
  • Mid-cap
    16%
  • Small-cap
    5%
  • Micro-cap
    1%

The market capitalization breakdown indicates a preference for stability and growth, with significant investments in Mega (31%) and Big (26%) cap stocks. This focus likely contributes to the portfolio's resilience during market volatility. However, the relatively lower allocation to Small (5%) and Micro (1%) caps suggests potential underutilization of growth opportunities in these segments. Increasing exposure to smaller companies could offer higher growth potential, albeit with increased risk.

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's current allocation suggests a well-considered balance between risk and return, aiming to position on the Efficient Frontier. This balance indicates an optimization of returns for the given level of risk. However, ongoing review and adjustment are essential to maintaining this optimal position, especially as market conditions and investment objectives evolve. Regularly reassessing the allocation and diversification can help in fine-tuning the portfolio to achieve the best possible risk-return ratio.

Ongoing product costs Info

  • iShares Global Aggregate Bond UCITS Dist 0.10%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Weighted costs total (per year) 0.16%

With a total expense ratio (TER) averaging 0.16%, the portfolio benefits from relatively low costs, which can significantly enhance long-term returns. Keeping investment costs low is a key component of successful long-term investing, as high fees can erode returns over time. Continuously monitoring and comparing costs against industry averages and value received is crucial for maintaining an efficient investment strategy.

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