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A balanced portfolio with a tech focus and strong North American exposure

Report created on Dec 24, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification
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Positions

The portfolio is composed primarily of ETFs and a selection of individual tech stocks, with a heavy emphasis on equities. This composition is typical for a balanced portfolio, offering a mix of broad market exposure through ETFs and targeted growth opportunities with individual stocks. The current allocation leans heavily towards equities, which may lead to higher volatility compared to a more diversified asset mix. Consider introducing fixed income or alternative investments to balance risk.

Growth Info

Historically, the portfolio has delivered impressive returns with a Compound Annual Growth Rate (CAGR) of 17.92%. This suggests strong performance relative to many benchmarks, albeit with a significant maximum drawdown of -19.38%. While past performance is encouraging, it doesn't guarantee future results. It's crucial to remain vigilant about market conditions and adjust the portfolio as needed to manage risk effectively.

Projection Info

Forward projections using Monte Carlo simulations indicate a wide range of potential outcomes, with a median return of 1,591.62%. This method uses historical data to model future performance, but it's important to remember that simulations are not predictions. They provide a range of possibilities based on past trends. Regularly review and adjust the portfolio to align with changing market conditions and personal goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards equities, with stocks comprising nearly 100% of the assets. This concentration in a single asset class can lead to increased risk, especially during market downturns. Diversification across asset classes, such as bonds or real estate, can help mitigate risk and provide more stable returns over time. Consider gradually introducing other asset classes to enhance diversification.

Sectors Info

  • Technology
    36%
  • Consumer Discretionary
    13%
  • Telecommunications
    12%
  • Financials
    11%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

Technology dominates the sectoral allocation at 35.83%, reflecting a strong growth focus. While this can drive returns in booming tech markets, it also increases vulnerability to sector-specific downturns. The portfolio's sectoral balance is otherwise aligned with common benchmarks, which is beneficial for diversification. To reduce risk, consider diversifying further into underrepresented sectors.

Regions Info

  • North America
    84%
  • Europe Developed
    7%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic exposure is heavily skewed towards North America, accounting for 83.98% of the portfolio. This concentration may limit the benefits of geographic diversification, such as reducing exposure to regional economic downturns. Expanding investments in other regions could enhance diversification and potentially capture growth in emerging markets. Consider increasing exposure to Europe, Asia, or other underrepresented areas.

Redundant positions Info

  • iShares Core S&P 500 UCITS ETF USD (Acc)
    Vanguard FTSE All-World UCITS ETF
    High correlation

The portfolio includes highly correlated assets, particularly the iShares Core S&P 500 and Vanguard FTSE All-World ETFs. High correlation indicates these assets often move in tandem, which can limit diversification benefits. To enhance risk management, consider replacing one of these ETFs with a less correlated option or diversifying into different asset classes to reduce overall portfolio correlation.

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.

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The portfolio's current structure suggests room for optimization using the Efficient Frontier, which aims to achieve the best risk-return balance. However, addressing the high asset correlation should be a priority before optimization. Efficient Frontier optimization can help identify the ideal asset mix to maximize returns for a given level of risk, but it requires a diversified asset base to be effective.

Dividends Info

  • Vanguard FTSE All-World UCITS ETF 0.90%
  • Weighted yield (per year) 0.41%

The portfolio's dividend yield is relatively low at 0.41%, reflecting its focus on growth rather than income. For investors seeking regular income, this may be a limitation. However, reinvesting dividends can contribute to long-term growth. If income generation is a priority, consider adding high-dividend stocks or income-focused funds to the portfolio to increase yield.

Ongoing product costs Info

  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Vanguard FTSE All-World UCITS ETF 0.22%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is impressively low at 0.14%, which is advantageous for long-term performance. Low costs mean more of your investment returns stay in your pocket rather than being eaten up by fees. This cost efficiency is a strong point of the portfolio, supporting better net returns over time. Continue to monitor fees and consider lower-cost alternatives if available.

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