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A balanced and highly diversified global investment portfolio with a strategic focus on growth

Report created on May 1, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is structured with a significant emphasis on equities, comprising 90% stocks and 9% other assets, primarily gold, showcasing a strategic tilt towards growth while maintaining a cushion against market volatility through precious metals. The allocation spans major global markets, including North America, Europe, and emerging markets in Asia, with a balanced exposure across developed and developing regions. This diversification is further enhanced by a spread across various sectors, with technology and financial services leading the allocation. The portfolio's composition aligns with a balanced risk profile, aiming to capture growth in diverse economic environments while mitigating risks through geographical and sectoral diversification.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 9.23%, with a maximum drawdown of -30.25%. This performance indicates a resilient strategy capable of generating substantial returns over time, albeit with periods of significant volatility. The days contributing to 90% of the returns highlight the portfolio's sensitivity to market movements and the importance of staying invested through cycles to capture key growth periods. Comparing this performance to relevant benchmarks could provide further insight into its relative strength in various market conditions.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of possible future outcomes, suggest a wide dispersion of potential returns for this portfolio. With the 50th percentile projection at a 121.6% return, it reflects optimism for growth. However, the 5th percentile at a -41.4% loss underscores the inherent risks. Such simulations are crucial for understanding potential volatility and assessing whether the portfolio aligns with the investor's risk tolerance and time horizon, despite the limitations of relying solely on historical data for future predictions.

Asset classes Info

  • Stocks
    90%
  • Other
    9%

The asset allocation showcases a heavy emphasis on equities, with a small yet strategic investment in gold. This composition underlines a growth-oriented approach with a hedge against inflation and market downturns through precious metals. While the equity allocation drives the portfolio's growth potential, the inclusion of gold can offer a stabilizing effect during periods of market uncertainty. Balancing growth with stability is key, and investors might consider whether the current asset class distribution optimally reflects their risk tolerance and investment objectives.

Sectors Info

  • Technology
    22%
  • Financials
    16%
  • Industrials
    12%
  • Consumer Discretionary
    11%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sectoral allocation is concentrated in technology, financial services, and industrials, which may influence the portfolio's volatility and growth prospects. Technology, often characterized by high growth potential, can be more volatile, while financial services and industrials provide a blend of growth and stability. This sectoral mix supports a balanced risk-return profile but warrants periodic review to ensure alignment with evolving market conditions and sectoral performance trends. Diversifying further within sectors or rebalancing to mitigate overexposure can enhance resilience against sector-specific risks.

Regions Info

  • North America
    31%
  • Europe Developed
    30%
  • Asia Emerging
    14%
  • Asia Developed
    9%
  • Japan
    7%

Geographic exposure is well-distributed across North America, Europe, and Asia, with a deliberate inclusion of emerging markets. This global footprint is instrumental in tapping into growth opportunities worldwide and spreading risk across different economic cycles and market conditions. However, the specific allocations, especially the weight towards emerging markets, should be periodically reassessed to align with global economic trends and geopolitical developments. Balancing exposure between developed and emerging markets is crucial for optimizing risk-adjusted returns.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    27%
  • No data
    9%
  • Mid-cap
    9%
  • Small-cap
    1%

The portfolio's market capitalization exposure leans heavily towards mega and big-cap stocks, constituting 79% of the allocation. This bias towards larger companies typically offers stability and resilience during market fluctuations but may limit exposure to the higher growth potential of smaller firms. Considering a more balanced approach by increasing exposure to medium and small-cap stocks could enhance growth prospects and diversification, albeit with a potential increase in volatility.

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 Efficient Frontier analysis suggests that the portfolio could potentially achieve an expected return of 11.88% at a similar risk level, indicating room for optimization. This analysis, while theoretical, underscores the possibility of enhancing returns without proportionately increasing risk. Investors should consider this insight as a prompt to review asset allocation and diversification strategies, aiming to fine-tune the portfolio towards achieving an optimal balance between risk and return.

Dividends Info

  • iShares MSCI Japan ETF 2.20%
  • iShares MSCI South Korea ETF 2.30%
  • SPDR® EURO STOXX 50 ETF 2.60%
  • SPDR® S&P Emerging Asia Pacific ETF 1.90%
  • SPDR S&P 500 ETF Trust 1.30%
  • Weighted yield (per year) 1.75%

The portfolio's dividend yield averages 1.75%, contributing to its total return. Dividends provide a steady income stream and can offer some cushion against market volatility. Given the portfolio's balanced risk profile, this yield strikes a reasonable balance between income and growth. Investors might consider the role of dividends in their overall investment strategy, particularly in terms of reinvestment opportunities or as a source of regular income, and adjust their holdings accordingly to optimize for yield without compromising growth potential.

Ongoing product costs Info

  • iShares MSCI Japan ETF 0.50%
  • iShares MSCI South Korea ETF 0.59%
  • SPDR® EURO STOXX 50 ETF 0.29%
  • SPDR® S&P Emerging Asia Pacific ETF 0.49%
  • iShares Gold Trust 0.25%
  • SPDR S&P 500 ETF Trust 0.10%
  • VanEck Vietnam ETF 0.66%
  • Weighted costs total (per year) 0.30%

With a Total Expense Ratio (TER) averaging 0.30%, the portfolio is positioned competitively in terms of costs, which is crucial for enhancing long-term returns. Lower costs mean more of the portfolio's gross returns are retained by the investor. While the portfolio's cost structure is commendable, ongoing vigilance is recommended to ensure that investment costs remain aligned with industry benchmarks and that any shifts in allocation continue to emphasize cost efficiency alongside performance objectives.

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