Balanced and Diversified Portfolio with a Strong Focus on North American Stocks and Technology Sector

Report created on Nov 12, 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 composed of two ETFs, with Vanguard FTSE All-World UCITS ETF making up 80% and iShares NASDAQ 100 UCITS ETF comprising 20%. This allocation provides broad diversification across global markets, with a significant focus on North American equities. The dominance of the Vanguard ETF ensures exposure to a wide range of sectors and geographic regions, while the iShares ETF adds a concentrated exposure to the technology-heavy NASDAQ 100. This composition helps in balancing global diversification with a tilt towards high-growth tech stocks, aligning well with a balanced risk profile.

Growth Info

Historically, the portfolio has shown a commendable performance with a CAGR of 13.79% and a maximum drawdown of -30.6%. This indicates strong returns over time, albeit with some volatility. The portfolio's performance is driven by its significant exposure to the technology sector and North American markets, which have performed well historically. While the returns are impressive, it's crucial to remember that past performance doesn't guarantee future results. To maintain this level of performance, it's important to regularly review and adjust the portfolio in response to changing market conditions.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance is projected under various market conditions. Assuming a hypothetical initial investment, the simulation indicates a wide range of potential outcomes, with the 5th percentile at 126.8% and the 67th percentile at 969.45%. The median projected return is 661.39%, with 997 simulations showing positive returns. This suggests a high probability of positive outcomes, reinforcing the portfolio's balanced risk profile. However, it's important to remain aware of the inherent uncertainties and potential for deviation from these projections.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.94% in equities. This high equity exposure aligns with a balanced risk profile, offering potential for capital growth. The minimal allocation to other asset classes, such as cash or bonds, indicates a focus on maximizing returns through equities. While this can lead to higher returns, it also increases the portfolio's sensitivity to market fluctuations. To mitigate risk, consider diversifying into other asset classes like bonds, which can provide stability and reduce volatility during market downturns.

Sectors Info

  • Technology
    30%
  • Financials
    13%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    10%
  • Industrials
    9%
  • Consumer Staples
    6%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is heavily skewed towards technology, making up 30.38% of the portfolio. Other significant sectors include financial services, consumer cyclicals, and healthcare. This concentration in technology can lead to higher returns, but also increases exposure to sector-specific risks. A diversified sector allocation can help mitigate these risks and provide stability. It's advisable to monitor sector performance and adjust allocations as necessary. Consider increasing exposure to underrepresented sectors to balance potential risks and opportunities across different economic cycles.

Regions Info

  • North America
    71%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic composition is predominantly North American, accounting for 71.17% of the allocation. This heavy weighting reflects the strong performance of North American markets, particularly in the technology sector. While this focus can drive returns, it also increases exposure to region-specific risks. Diversifying geographically can help mitigate these risks and capture growth opportunities in other regions. Consider increasing allocations to underrepresented regions, such as Europe or emerging markets, to enhance diversification and reduce reliance on North American markets.

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 concept of the efficient frontier suggests that the current portfolio may not be optimized for maximum returns at the given risk level. An optimal portfolio could achieve a higher expected return of 20.44% with a risk level of 20.72%. This indicates potential for improvement by adjusting allocations. However, it's important to balance the desire for higher returns with risk tolerance and investment goals. Regularly reviewing the portfolio and making strategic adjustments can help align it with the efficient frontier, optimizing performance without compromising risk management.

Ongoing product costs Info

  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.25%

The portfolio's total expense ratio (TER) is 0.25%, with the Vanguard ETF at 0.22% and the iShares ETF at 0.36%. These low costs are beneficial, as they minimize the impact of fees on overall returns. Keeping costs low is crucial for maximizing net returns over time. While the current TER is competitive, it's important to regularly review expense ratios and consider lower-cost alternatives if available. This can help improve overall performance and ensure that a larger portion of returns is retained by the investor.

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