A globally diversified portfolio with a tech focus and moderate risk profile

Report created on Feb 23, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards the Vanguard FTSE All-World UCITS ETF, which constitutes 80% of the holdings. This ETF provides broad exposure to global equities. The remaining 20% is evenly split between the iShares S&P 500 Information Technology Sector ETF and the iShares MSCI World Small Cap ETF. This composition leans towards a growth-focused strategy with a significant emphasis on technology and smaller companies. Compared to typical balanced portfolios, this one has a higher concentration in equities, which could lead to higher volatility but also potential for higher returns.

Growth Info

Historically, the portfolio has demonstrated strong performance with a Compound Annual Growth Rate (CAGR) of 13.24%. This indicates that the portfolio has grown significantly over time, outperforming many traditional investment benchmarks. However, it's important to note the maximum drawdown of -33.39%, which highlights the potential for significant losses during market downturns. While past performance is not indicative of future results, understanding these figures can help set expectations for future volatility and growth potential.

Projection Info

Forward projection using Monte Carlo simulation involves running numerous scenarios to estimate potential future outcomes. With 1,000 simulations, the portfolio's potential end values range widely, with the 5th percentile at 65.5% and the 67th percentile at 811.1%. The median outcome is a robust 533.9% increase. This suggests a favorable outlook, but remember, these are estimates based on historical data and assumptions. While the simulations show a high likelihood of positive returns, they cannot predict future market conditions or guarantee specific outcomes.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, lacking diversification across different asset classes such as bonds or cash. This focus on equities suggests a growth-oriented approach but increases exposure to market volatility. Typically, balanced portfolios include a mix of asset classes to cushion against downturns. While the current allocation may align with growth goals, consider introducing other asset types for risk mitigation and stability, especially during periods of market stress.

Sectors Info

  • Technology
    33%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation is heavily skewed towards technology, which accounts for 33% of the portfolio. This concentration can lead to higher volatility, especially during periods of technological market fluctuations or interest rate changes. Other sectors like financial services, consumer cyclicals, and industrials provide some diversification. However, the portfolio could benefit from a more balanced sector distribution to reduce reliance on the tech sector and improve resilience against sector-specific downturns.

Regions Info

  • North America
    70%
  • Europe Developed
    13%
  • Japan
    6%
  • Asia Emerging
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly exposed to North America, making up 70% of the allocation. While this aligns with the region's strong historical performance, it limits exposure to other potentially high-growth areas like emerging markets. Diversifying geographically can help mitigate regional risks and tap into growth opportunities in underrepresented areas. Consider increasing allocations to regions like Asia or Europe to enhance diversification and capitalize on global economic trends.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    31%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization distribution is dominated by mega-cap stocks at 44%, followed by large caps at 31%. This suggests a focus on established companies, which can provide stability but may limit growth potential compared to smaller companies. With only 5% in small-cap stocks, the portfolio might miss out on the higher growth typically associated with smaller firms. A more balanced mix across different market caps could enhance growth potential while maintaining stability.

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 may benefit from optimization using the Efficient Frontier, a concept that helps identify the best possible risk-return ratio for a given set of assets. By adjusting the allocation between existing ETFs, the portfolio could achieve a better balance of risk and return. This process involves analyzing historical returns and volatility to find an optimal mix. While the current allocation is growth-focused, fine-tuning could enhance performance without significantly increasing risk.

Ongoing product costs Info

  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • 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) 0.23%

The portfolio's total expense ratio (TER) stands at 0.23%, which is relatively low and beneficial for long-term performance. Lower costs mean more of the portfolio's returns are retained, enhancing compounding effects over time. This cost efficiency aligns well with best practices in portfolio management. Continue monitoring for opportunities to reduce costs further, such as by selecting lower-cost ETFs, to maximize net returns and support long-term growth objectives.

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