Balanced and broadly diversified ETF portfolio with a focus on global equities and emerging markets

Report created on May 24, 2025

Risk profile Info

4/7
Balanced
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Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of four iShares ETFs, focusing predominantly on equities across a variety of regions and market capitalizations. The majority allocation to the iShares Core MSCI World UCITS ETF suggests a strong foundation in developed markets, while significant positions in emerging markets and India-specific ETFs indicate a strategic tilt towards high-growth potential areas. The inclusion of a small-cap ETF further diversifies the portfolio, aiming to capture growth in smaller companies.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 9.93% and a maximum drawdown of -34.95%, the portfolio has demonstrated resilience and the ability to recover from market downturns. The days contributing to 90% of returns emphasize the impact of significant market movements on performance. When compared to benchmarks, this performance highlights the portfolio's balanced approach to risk and return, suitable for investors with a moderate risk tolerance.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance is projected with a wide range of outcomes. The median projection suggests a potential 181.3% return, indicating a positive outlook. However, it's crucial to remember that such simulations are based on historical data and assumptions, and actual future performance can vary. This tool helps in understanding potential risks and rewards but doesn't guarantee future results.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, reflecting a focused approach to equity investment. While this can offer higher growth potential, it also comes with increased volatility compared to portfolios that include bonds or other asset classes. Diversifying across different asset types could provide a buffer against market fluctuations and reduce overall portfolio risk.

Sectors Info

  • Technology
    21%
  • Financials
    19%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

The sector allocation shows a balanced mix, with significant exposure to technology and financial services. This sector distribution aligns with global market trends, where these sectors play a dominant role. However, heavy concentration in any sector can introduce specific risks, and the technology sector, in particular, is known for its volatility. Diversifying more evenly across sectors could mitigate sector-specific risks.

Regions Info

  • North America
    50%
  • Asia Emerging
    20%
  • Europe Developed
    12%
  • Asia Developed
    6%
  • Japan
    5%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    2%

Geographic distribution is well-diversified, with a heavy emphasis on North America and significant exposure to emerging markets in Asia. This geographical spread can capture growth in various economies but also introduces geopolitical and currency risks. Considering the current global economic climate, an investor might benefit from re-evaluating the allocation to certain regions.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    9%
  • Micro-cap
    2%

The market capitalization breakdown shows a balanced approach, with a focus on mega and big-cap stocks. This suggests a preference for stability and lower volatility associated with larger companies. However, the presence of small and micro-cap stocks indicates an appetite for higher growth potential, albeit with increased risk. Adjusting the balance between market caps can fine-tune the portfolio's risk-return profile.

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 current portfolio's expected return is slightly below the optimal portfolio's return of 11.87%, suggesting room for improvement in risk-return efficiency. Adjusting the asset allocation could potentially increase returns for the same level of risk. This optimization process involves balancing the trade-off between risk and return to align with the investor's objectives and risk tolerance.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • iShares MSCI India UCITS ETF USD Acc 0.65%
  • Weighted costs total (per year) 0.26%

The Total Expense Ratio (TER) averages to 0.26%, which is relatively low, enhancing the portfolio's attractiveness by keeping costs in check. Lower costs mean more of the investment's return is retained by the investor, which can significantly impact long-term growth. Continuously monitoring and minimizing investment costs remains a key strategy for enhancing portfolio performance.

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