Balanced portfolio with a global focus and emphasis on technology and developed markets

Report created on May 11, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of equity ETFs, with a significant allocation to global and developed market indices, alongside a smaller exposure to specific sectors and regions such as technology in China and gold. This structure demonstrates a strategic approach to achieving diversified exposure across major global markets, sectors, and asset classes. The heavy weighting towards ETFs suggests a preference for broad market exposure and the benefits of diversification within those selections. However, the concentration in certain regions and sectors might influence the portfolio's volatility and performance relative to global market movements.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 8.09%, with a maximum drawdown of -16.56%. These figures suggest that the portfolio has experienced a reasonable level of growth while also encountering periods of significant value decline. The days contributing most to returns indicate that a small number of trading days have driven a substantial portion of the portfolio's performance. This highlights the importance of staying invested over the long term, as missing these key days could significantly impact overall returns.

Projection Info

Using a Monte Carlo simulation, which projects future performance based on historical data, we see a wide range of potential outcomes. The median projection suggests more than doubling the initial investment, but the 5th percentile outcome indicates a significant potential loss. This spread underscores the inherent uncertainty in predicting market movements and reinforces the need for a balanced approach to risk management. These projections are useful for setting realistic expectations, but it's crucial to remember that they are hypothetical and do not guarantee future results.

Asset classes Info

  • Stocks
    95%
  • Other
    5%

The portfolio's asset allocation is heavily skewed towards stocks (95%), with a minimal allocation to other asset classes (5%), such as commodities represented by gold. This high equity exposure aligns with the portfolio's balanced risk profile but tilts towards the higher end of the risk spectrum within that category. Diversifying across different asset classes can help mitigate risk, as different assets can react differently to market conditions. Considering adding more variety to the asset classes could enhance the portfolio's resilience against market volatility.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is concentrated in technology, financial services, and consumer cyclicals, which are sectors known for their growth potential but also their volatility. This concentration increases the portfolio's exposure to sector-specific risks, such as regulatory changes or economic cycles affecting these industries. Diversifying more evenly across sectors could reduce the portfolio's vulnerability to single-sector downturns and provide a more stable performance across different market conditions.

Regions Info

  • North America
    51%
  • Europe Developed
    23%
  • Asia Emerging
    9%
  • Asia Developed
    4%
  • Australasia
    3%
  • Japan
    3%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic distribution is heavily weighted towards North America and developed Europe, with smaller exposures to emerging Asia and other regions. This reflects a conservative approach, favoring stable, developed markets over the potentially higher returns (and higher risks) of emerging markets. While this allocation may offer some protection against geopolitical and currency risks inherent in emerging markets, incorporating a broader geographic exposure could capture growth opportunities outside of the developed world.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    32%
  • Mid-cap
    14%
  • No data
    5%

The focus on mega and big-cap companies suggests a preference for stability and lower volatility associated with larger, more established companies. However, this comes at the potential cost of missing out on the higher growth rates often found in smaller companies. Considering a more balanced allocation across different market capitalizations could introduce more growth potential into the portfolio, albeit with an associated increase in 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 Efficient Frontier analysis suggests that the portfolio could achieve a higher expected return at the same risk level, indicating room for optimization. Adjusting the asset allocation could potentially increase the portfolio's efficiency, enhancing the risk-return profile. This process involves rebalancing towards assets or sectors that may offer higher expected returns for the same level of risk, or alternatively, reducing exposure to underperforming or overly volatile assets.

Dividends Info

  • Vanguard FTSE Developed Asia Pacific ex Japan UCITS 1.40%
  • Weighted yield (per year) 0.07%

The dividend yield, while a minor component of the portfolio's overall return, contributes to its income generation capabilities. Given the portfolio's growth-oriented structure, dividends play a secondary role to capital appreciation. However, for investors seeking a balance between growth and income, increasing exposure to assets with higher dividend yields could provide a more consistent income stream while still allowing for capital growth.

Ongoing product costs Info

  • Invesco EQQQ NASDAQ-100 UCITS ETF (GBP Hdg) 0.35%
  • iShares Physical Gold ETC 0.25%
  • Vanguard FTSE Developed Asia Pacific ex Japan UCITS 0.15%
  • Vanguard FTSE Developed Europe UCITS ETF EUR Accumulation 0.10%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.21%

The Total Expense Ratio (TER) of the portfolio is relatively low, averaging 0.21%, which is beneficial for long-term performance as lower costs translate directly into higher net returns for the investor. The portfolio's cost efficiency is commendable, particularly given its diversified exposure across various ETFs. Maintaining focus on cost efficiency, especially when considering future adjustments or additions to the portfolio, will continue to support better net performance over time.

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