A growth-focused portfolio with notable exposure to North American equities and technology sectors

Report created on Dec 30, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of ETFs, with a significant focus on global equities. The Amundi MSCI World UCITS ETF holds the largest share at 31.5%, followed by BNP Paribas Easy Stoxx Europe 600 and EasyETF S&P 500. Such a composition suggests a strong inclination towards equity markets, particularly in developed regions. Compared to a typical balanced portfolio, this one leans more heavily towards equities, indicating a preference for growth over stability. To enhance diversification, consider introducing more varied asset types, such as bonds or commodities, which can provide a buffer during market downturns.

Growth Info

The historical performance of this portfolio is impressive, with a Compound Annual Growth Rate (CAGR) of 19.12%. This indicates robust growth over time, outpacing many traditional benchmarks. However, it's essential to note the maximum drawdown of -37.79%, highlighting the potential for significant losses during market volatility. While past performance offers insights, it's not a guarantee of future results. To mitigate risks, consider strategies to reduce drawdowns, such as diversifying into less volatile assets or employing hedging techniques.

Projection Info

Forward projections using Monte Carlo simulations indicate a wide range of potential outcomes. With a median (50th percentile) return of 1,231.17%, the simulations suggest strong future performance. However, the 5th percentile outcome of 152.51% underscores the inherent uncertainties. Monte Carlo simulations rely on historical data, which cannot predict future market conditions. To prepare for various scenarios, it's wise to periodically review and adjust the portfolio, ensuring it aligns with changing market dynamics and personal risk tolerance.

Asset classes Info

  • Stocks
    73%
  • Other
    27%

The portfolio is heavily weighted towards stocks, comprising approximately 73.38% of the total allocation. This high equity exposure aligns with growth objectives but also introduces higher volatility. The remaining 26.62% is classified as "Other," which may include non-traditional investments. Compared to typical benchmarks, this allocation is more aggressive, favoring potential high returns over stability. To enhance risk management, consider incorporating fixed-income assets, which can provide income and reduce overall portfolio volatility.

Sectors Info

  • Technology
    17%
  • Financials
    12%
  • Health Care
    9%
  • Industrials
    9%
  • Consumer Discretionary
    7%
  • Consumer Staples
    5%
  • Telecommunications
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

The technology sector dominates the portfolio at 16.63%, followed by financial services and healthcare. This sectoral concentration suggests a focus on industries with growth potential but also exposes the portfolio to sector-specific risks. For example, tech-heavy portfolios may experience heightened volatility during interest rate hikes. The current sector allocation is relatively balanced but could benefit from increased exposure to underrepresented areas like utilities or real estate, which can offer stability and diversification benefits.

Regions Info

  • North America
    44%
  • Europe Developed
    27%
  • Japan
    2%
  • Australasia
    1%

Geographically, the portfolio is heavily skewed towards North America, comprising 44.01% of the allocation, followed by Europe Developed at 26.78%. This concentration in developed markets suggests a preference for stability and established economies. However, it also limits exposure to potentially high-growth emerging markets. While this allocation aligns with common benchmarks, introducing more geographic diversity could help capture opportunities in underrepresented regions and reduce regional risk exposure.

Redundant positions Info

  • Amundi Index Solutions - Amundi MSCI World UCITS ETF C EUR
    EasyETF - BNP Paribas Easy S&P 500 UCITS ETF
    High correlation

The portfolio contains highly correlated assets, particularly between the Amundi MSCI World UCITS ETF and EasyETF S&P 500. High correlation means these assets tend to move together, which can limit diversification benefits. During market downturns, this could lead to amplified losses. To enhance diversification, consider replacing or reducing exposure to highly correlated assets with alternatives that offer uncorrelated or negatively correlated returns, thereby improving overall portfolio resilience.

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 can potentially be optimized using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. However, the presence of highly correlated assets suggests room for improvement. By adjusting allocations or incorporating less correlated assets, the portfolio could achieve a more efficient balance. This optimization focuses solely on risk and return, so it's important to align changes with broader investment goals, such as diversification or income generation.

Ongoing product costs Info

  • Amundi Index Solutions - Amundi MSCI World UCITS ETF C EUR 0.38%
  • EasyETF - BNP Paribas Easy S&P 500 UCITS ETF 0.12%
  • BNP Paribas Easy Stoxx Europe 600 UCITS ETF EUR C 0.18%
  • Lyxor UCITS NASDAQ-100 Daily Leverage 0.60%
  • Amundi ETF PEA Nasdaq-100 UCITS ETF 0.23%
  • Weighted costs total (per year) 0.31%

The portfolio's total expense ratio (TER) is 0.31%, which is relatively low, supporting better long-term performance by minimizing costs. The individual ETF costs range from 0.12% to 0.6%, with the Lyxor NASDAQ-100 ETF being the most expensive. Keeping costs low is crucial for preserving returns over time. To further optimize, evaluate whether lower-cost alternatives exist for any high-fee assets. Reducing costs without sacrificing performance can significantly enhance net returns.

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