Globally diversified equity portfolio with strong factor tilts and room for efficiency improvements

Report created on May 17, 2024

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 a pure equity mix built entirely from broad ETFs, with no bonds or cash positions. Around one third sits in a large US index fund, with sizeable slices in Europe, US growth, China A-shares, emerging markets, and small caps. This makes it an equity-only structure that leans on diversification across regions and styles rather than on safer assets. That matters because 100% stocks typically means higher long-term growth potential but bumpier short-term swings. The key takeaway is that this structure fits someone who wants growth and accepts volatility, but it would not feel comfortable for someone looking for very stable returns or short-term capital preservation.

Growth Info

From late 2018 to March 2026, €1,000 grew to about €2,100, giving a compound annual growth rate (CAGR) of 10.26%. CAGR is the “average speed” of growth per year, smoothing out the ups and downs. The portfolio’s max drawdown, or worst peak‑to‑trough fall, was about -31.5%, similar to big equity market corrections. Over the same period, the US market grew faster at 12.67% and the global market slightly faster at 10.54%. So returns have been solid, but a bit behind benchmarks, likely due to some regional and factor tilts. As always, past performance doesn’t guarantee future results, but it shows the risk profile is consistent with a balanced equity approach.

Asset classes Info

  • Stocks
    100%

All holdings are in stocks, with 0% in bonds, cash, or alternatives. This makes the portfolio straightforward and easy to understand, but it also means no built‑in ballast to soften equity drawdowns. Many broad “balanced” allocations would mix in bonds or other lower‑volatility assets to dampen swings and smooth the ride. Here, diversification happens within equities themselves: different regions, company sizes, and styles. That’s effective for spreading stock‑specific risk, but it won’t fully protect against global equity sell‑offs. The implication: this structure works best for someone whose main goal is long‑term growth and who is comfortable seeing significant short‑term fluctuations without needing to sell.

Sectors Info

  • Technology
    27%
  • Financials
    15%
  • Industrials
    12%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector exposure is pleasantly diversified, with technology largest at 27%, followed by meaningful slices in financials, industrials, consumer areas, and health care. This looks broadly in line with major global indices, which is a strong indicator of sensible diversification. A notable point is the tech tilt combined with the heavy mega‑cap names seen in the look‑through data, which could add extra sensitivity to interest-rate moves and growth expectations. In periods of rising rates or rotation away from tech, the portfolio might feel more volatile than a more defensive mix. Overall though, this sector composition is well‑balanced and aligns closely with global standards, which supports long‑term resilience across different economic environments.

Regions Info

  • North America
    55%
  • Europe Developed
    22%
  • Asia Emerging
    15%
  • Asia Developed
    4%
  • Latin America
    1%
  • Japan
    1%
  • Africa/Middle East
    1%

Geographically, about 55% is in North America, 22% in developed Europe, and 15% in emerging Asia, with smaller slices elsewhere. This is reasonably close to global equity benchmarks, though with a slightly elevated Europe share and explicit China A‑share exposure. Having meaningful emerging Asia exposure can boost long‑term growth potential but also brings higher political and regulatory risk. The China A allocation in particular can behave quite differently from developed markets, which helps diversification but can also increase headline risk. Overall, this global spread is broadly diversified and not overly home‑biased, which is beneficial for a euro‑based investor wanting exposure to global growth engines without being tied to a single region.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    14%
  • Small-cap
    7%
  • Micro-cap
    4%

The portfolio is tilted toward larger companies, with 43% in mega‑caps and 31% in large‑caps, but it also includes a healthy 25% combined in mid, small, and micro‑caps. Market capitalization exposure matters because big firms tend to be more stable and tied to global indices, while small and micro‑caps can be more volatile but offer higher potential growth and diversification. Dedicated small‑cap ETFs add intentional size exposure, which is different from just holding a broad large‑cap index. This mix strikes a nice balance: enough large‑cap core to keep volatility manageable, plus smaller companies to capture size and value effects over time, which research suggests can reward patient investors.

True holdings Info

  • NVIDIA Corporation
    3.54%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Apple Inc
    3.21%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Microsoft Corporation
    2.40%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Amazon.com Inc
    1.73%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Alphabet Inc Class A
    1.49%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Meta Platforms Inc.
    1.29%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Alphabet Inc Class C
    1.25%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Broadcom Inc
    1.24%
    Part of fund(s):
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Tesla Inc
    1.16%
    Part of fund(s):
    • LS 1x Tesla Tracker ETP Securities GBP
    • iShares Core S&P 500 UCITS ETF USD (Acc)
    • iShares NASDAQ 100 UCITS ETF
  • Taiwan Semiconductor Manufacturing Co. Ltd.
    1.15%
    Part of fund(s):
    • iShares Core MSCI Emerging Markets IMI UCITS
  • Top 10 total 18.45%

Looking through the ETFs, the biggest underlying exposures are familiar global giants: NVIDIA, Apple, Microsoft, Amazon, Alphabet, Meta, Broadcom, Tesla, and TSMC. These appear in several funds, so even without direct single-stock positions, there’s hidden concentration in large tech and growth names. Overlap is likely understated because only top-10 ETF holdings are used, meaning actual exposure to these firms is probably higher. This is normal in market‑cap weighted indexing, but it does mean portfolio behavior will be quite sensitive to how these mega‑cap companies perform. The main takeaway: diversification across funds still leads to common underlying winners, which is fine as long as that tilt is intentional.

Factors Info

Value
Preference for undervalued stocks
High
Data availability: 100%
Size
Exposure to smaller companies
High
Data availability: 100%
Momentum
Exposure to recently outperforming stocks
Neutral
Data availability: 100%
Quality
Preference for financially healthy companies
Neutral
Data availability: 100%
Yield
Preference for dividend-paying stocks
Low
Data availability: 100%
Low Volatility
Preference for stable, lower-risk stocks
High
Data availability: 100%

Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.

Factor exposure shows clear tilts: high value, high size (toward smaller firms), and high low‑volatility, with neutral momentum and quality and a lower tilt to yield. Factors are like the “ingredients” that drive returns: value targets cheaper stocks, size leans into smaller companies, and low‑volatility favors steadier names. This combination is interesting: value and size can add long‑run return potential, while low‑volatility can help smooth the ride compared with a pure market‑cap growth portfolio. However, value and size can lag for long stretches, as seen in the 2010s, and can underperform during sharp growth‑stock rallies. Overall, these tilts make the portfolio behave differently from a plain global index, in a way that’s thoughtful and research‑backed.

Risk contribution Info

  • iShares Core S&P 500 UCITS ETF USD (Acc)
    Weight: 33.07%
    33.3%
  • iShares Core MSCI Europe UCITS ETF EUR (Acc)
    Weight: 17.13%
    15.5%
  • iShares NASDAQ 100 UCITS ETF
    Weight: 13.34%
    15.4%
  • SPDR® Russell 2000 US Small Cap UCITS ETF EUR
    Weight: 8.59%
    10.6%
  • iShares Core MSCI Emerging Markets IMI UCITS
    Weight: 9.85%
    9.8%
  • Top 5 risk contribution 84.6%

Risk contribution shows how much each ETF adds to overall ups and downs, which can differ from simple weights. The S&P 500 ETF is about one third of the portfolio and contributes a very similar share of risk, so it’s proportionate. The NASDAQ 100 and US small‑cap ETFs stand out slightly: NASDAQ 100 is 13.3% of weight but 15.4% of risk, and Russell 2000 is 8.6% of weight but 10.6% of risk. Together with the S&P 500, the top three positions drive over 64% of portfolio risk. That’s not alarming, but it does mean that any future tweaks to these allocations will have an outsized impact on the overall risk 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.

On the risk–return chart, the current portfolio has a Sharpe ratio of 0.58, with expected return around 11.34% and volatility about 16%. The Sharpe ratio measures return per unit of risk, so higher is better. The optimal mix of the existing ETFs reaches a Sharpe of 0.74, while the minimum‑variance mix sits at 0.60. Because the current allocation lies about 1.34 percentage points below the efficient frontier at the same risk level, there’s room for improvement just by reweighting existing holdings. No new products are needed; simply shifting weights toward the “max Sharpe” or a similar efficient mix could enhance risk‑adjusted returns while keeping the overall risk profile broadly comparable.

Ongoing product costs Info

  • iShares MSCI China A UCITS USD 0.40%
  • Xtrackers MSCI Pacific ex Japan UCITS ETF 1C 0.25%
  • iShares Core MSCI Europe UCITS ETF EUR (Acc) 0.20%
  • iShares Core MSCI Japan IMI UCITS ETF USD (Acc) 1.00%
  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares NASDAQ 100 UCITS ETF 0.36%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • SPDR® Russell 2000 US Small Cap UCITS ETF EUR 0.30%
  • SPDR® MSCI Europe Small Cap Value Weighted UCITS ETF EUR Acc 0.30%
  • Weighted costs total (per year) 0.24%

The overall total expense ratio (TER) of about 0.24% is impressively low for a diversified, multi‑ETF global equity portfolio. TER is the annual fee charged by funds, and even small differences compound significantly over decades. Most holdings sit in the 0.12–0.40% range, which is very reasonable for broad index and factor‑tilted exposure. The one outlier is the Japan ETF at 1.00%, but its weight is under 1%, so the impact on total costs is tiny. Keeping costs this low is a real strength: it leaves more of the market’s return in your pocket and supports better long‑term outcomes compared with higher‑fee active strategies or niche products.

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