Balanced growth-focused portfolio with strong emphasis on US equities and emerging markets

Report created on Aug 8, 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 structured with a heavy emphasis on equities, split between a 70% allocation to the iShares Core S&P 500 UCITS ETF and a 30% allocation to the iShares Core MSCI Emerging Markets IMI UCITS. This composition reflects a strategic focus on capitalizing on the growth potential of large-cap US companies while also seeking diversified exposure to emerging markets. The absence of fixed income or alternative investments indicates a growth-oriented strategy, albeit with a balanced approach given the diversification across developed and emerging markets.

Growth Info

Historically, this portfolio has achieved a compound annual growth rate (CAGR) of 12.21%, with a maximum drawdown of -33.50%. These figures suggest a relatively strong performance, particularly in terms of annual growth. However, the significant drawdown highlights potential volatility and risk, especially relevant during market downturns. The concentration in high-growth sectors like technology, which can be more susceptible to market swings, likely contributes to this volatility.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, we see a wide range of potential outcomes. The 50th percentile outcome suggests a 295% return, indicating strong growth potential. However, the wide range between the 5th and 67th percentiles (38.5% to 444.1%) underscores the inherent uncertainty and risk. While these projections offer valuable insights, it's crucial to remember they are based on past trends, which are not guaranteed to repeat.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no presence of bonds, cash, or alternative asset classes. This allocation underscores a clear preference for growth over income or preservation of capital. While stocks offer higher potential returns, they also come with increased volatility and risk. A more diversified asset class mix could provide a buffer against market fluctuations and reduce overall portfolio volatility.

Sectors Info

  • Technology
    31%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Telecommunications
    9%
  • Industrials
    8%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is heavily weighted towards technology, financial services, and consumer cyclicals, which are sectors often associated with higher growth but also increased volatility. The significant technology weighting, in particular, may expose the portfolio to sector-specific risks, such as regulatory changes or rapid market sentiment shifts. Balancing sector exposure could mitigate some of these risks while still allowing for growth opportunities.

Regions Info

  • North America
    70%
  • Asia Emerging
    15%
  • Asia Developed
    9%
  • Africa/Middle East
    3%
  • Latin America
    2%
  • Europe Emerging
    1%
  • Europe Developed
    1%

Geographic exposure is primarily in North America and emerging markets in Asia, with minimal allocations to Europe, Latin America, and Africa/Middle East. This geographic distribution leverages the growth potential in the US and emerging markets but may underrepresent opportunities in developed markets outside the US. Expanding geographic diversity could enhance risk-adjusted returns by tapping into different economic cycles and opportunities.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's emphasis on mega and large-cap stocks (80% combined) suggests a focus on stability and growth potential of established companies. While these companies are generally less volatile than their smaller counterparts, the portfolio may miss out on the higher growth potential offered by mid and small-cap stocks. Incorporating a broader range of market capitalizations could enhance diversification and potential for growth.

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.

While the current portfolio has performed well, optimization analysis suggests that an adjusted allocation could potentially achieve an expected return of 13.97% at the same risk level. This implies that there may be opportunities to reallocate assets within the portfolio to achieve a more favorable risk-return profile, without necessarily increasing the overall risk.

Ongoing product costs Info

  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • Weighted costs total (per year) 0.14%

The portfolio benefits from low total expense ratios (TERs) of 0.12% and 0.18% for the S&P 500 and Emerging Markets ETFs, respectively, leading to an average cost of 0.14%. This cost-efficiency supports higher net returns over the long term, as lower costs directly translate to more money remaining invested and compounding over time.

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