A globally diversified single ETF portfolio with strong historical growth and moderate risk profile

Report created on Jan 1, 2025

Risk profile Info

4/7
Balanced
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Diversification profile Info

4/5
Broadly Diversified
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Positions

The portfolio consists entirely of the Vanguard FTSE All-World UCITS ETF USD Accumulation, offering a comprehensive exposure to global equities. This ETF provides a broad diversification across multiple sectors and regions, which is typically beneficial for risk management. However, having 100% allocation in a single ETF may limit flexibility and adaptability to market changes. It's important to periodically review this allocation to ensure it continues to align with personal investment goals and risk tolerance, possibly considering additional asset classes or funds for further diversification.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 12.68%. This growth rate indicates strong performance compared to typical global benchmarks. However, the maximum drawdown of -33.45% highlights potential volatility, especially during market downturns. It's crucial to understand that past performance doesn't guarantee future results, but it can provide insights into potential risks and returns. Regularly monitoring performance and staying informed about market conditions can help in maintaining a balanced approach to risk and reward.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, shows promising results for this portfolio. With a median projection of 418.89% growth, the potential for positive returns is high, as evidenced by 995 out of 1,000 simulations showing positive outcomes. However, it's important to remember that simulations are based on past data and cannot account for unforeseen market changes. Regularly revisiting projections and adapting strategies as needed can help maintain alignment with long-term financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted in stocks, accounting for nearly 100% of the allocation. While this concentration can drive growth, it may also increase volatility, particularly during market downturns. Diversification across asset classes, such as bonds or real estate, could potentially reduce risk and stabilize returns. Comparing this allocation to benchmark norms, which often include a mix of asset classes, might highlight opportunities for diversification to better balance risk and reward.

Sectors Info

  • Technology
    26%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation is well-diversified, with significant exposure to technology, financial services, and healthcare. This alignment with common benchmarks suggests a balanced approach to sector diversification. However, the high concentration in technology could lead to increased volatility, especially during periods of regulatory changes or interest rate hikes. Regularly reviewing sector allocations and adjusting as necessary can help manage risk and take advantage of emerging trends in other sectors.

Regions Info

  • North America
    66%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic allocation is notably concentrated in North America, which comprises over 65% of the holdings. While this may benefit from the strong performance of U.S. markets, it also exposes the portfolio to region-specific risks. Diversifying further into underrepresented regions like Latin America or Africa/Middle East could enhance global exposure and reduce reliance on a single market. Comparing this allocation to global benchmarks can provide insights into potential areas for geographic diversification.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

The portfolio's Total Expense Ratio (TER) of 0.22% is relatively low, which is advantageous for long-term investors. Lower costs mean more of your returns stay in your pocket, enhancing net performance over time. It's important to periodically evaluate whether there are opportunities to further reduce costs, such as exploring other low-cost ETFs or funds. Keeping an eye on fees and expenses is a simple yet effective way to improve long-term investment outcomes.

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