A well-diversified global equity portfolio with strong US focus and low cost structure

Report created on Dec 26, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed of two ETFs: the Vanguard FTSE All-World UCITS ETF and the Vanguard S&P 500 UCITS ETF, with allocations of 57.14% and 42.86% respectively. This composition leans heavily towards equities, providing broad global exposure with a significant focus on the US market. Compared to common benchmarks, this structure aligns with a typical balanced portfolio, offering a diversified approach across regions and sectors. Maintaining such a composition supports diversified growth potential, though it could benefit from slight adjustments to further enhance diversification.

Growth Info

Historically, this portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 13.43%, indicating robust past performance. The maximum drawdown of -25.28% showcases the potential risk during market downturns, which is a common aspect of equity-heavy portfolios. While past performance isn't a guarantee of future results, this historical context helps set expectations. Comparing to benchmarks, this performance aligns well, suggesting the portfolio's structure has been effective. It is advisable to continue monitoring performance trends to ensure alignment with your investment goals.

Projection Info

Forward projections using Monte Carlo simulations, which model potential future outcomes based on historical data, indicate an annualized return of 14.69%. With 1,000 simulations, the portfolio shows a high likelihood of positive returns, with 997 simulations yielding gains. The 50th percentile projection suggests a potential return of 487.65%, highlighting the portfolio’s growth potential. However, it's important to note that these projections are based on historical trends and assumptions, and actual future performance can vary. Regularly reviewing these projections can help in managing expectations and making informed adjustments.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is heavily skewed towards stocks, comprising nearly 100% of the assets. This singular focus on equities can drive strong growth but also increases exposure to market volatility. Compared to benchmark norms, which often include bonds or other asset classes for stability, this portfolio lacks diversification across asset types. Introducing other asset classes, such as fixed income or real assets, could potentially reduce risk and enhance stability, especially during market downturns. This adjustment could help in achieving a more balanced risk-return profile.

Sectors Info

  • Technology
    29%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Health Care
    11%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is well-distributed across 11 sectors, with notable concentrations in Technology (28.64%) and Financial Services (15.16%). This distribution reflects a balanced approach, though the high exposure to technology could lead to increased volatility, especially in response to interest rate changes or regulatory shifts. Compared to common benchmarks, this sector composition is fairly aligned, providing a diversified exposure. It's beneficial to periodically review sector allocations to ensure they align with market trends and personal risk tolerance, potentially adjusting to mitigate any overexposure.

Regions Info

  • North America
    80%
  • Europe Developed
    9%
  • Asien Schwellenländer
    3%
  • Japan
    3%
  • Asien
    2%
  • Australasia
    1%
  • Afrika/Mittlerer Osten
    1%
  • Latin America
    1%

The portfolio's geographic allocation is heavily weighted towards North America, particularly the US, at 80.06%. While this aligns with global market capitalizations, it may limit exposure to growth opportunities in other regions. European and Asian markets, for instance, are underrepresented compared to some global benchmarks. Expanding geographic diversification can reduce regional risk and capture growth in emerging markets. Consider assessing whether this geographic focus aligns with your investment goals, and explore opportunities to increase exposure to other regions.

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.

Optimization of this portfolio using the Efficient Frontier suggests that the current asset allocation is near optimal for the given risk-return profile. The Efficient Frontier represents the best possible return for a given level of risk, based on historical data. While the portfolio is already well-aligned, minor adjustments could further enhance efficiency by fine-tuning the balance between the two ETFs. Regularly reviewing and adjusting allocations can help maintain an optimal risk-return balance, ensuring the portfolio continues to meet your financial objectives.

Ongoing product costs Info

  • Vanguard S&P 500 UCITS Acc 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.16%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.16%. This low-cost structure is beneficial for long-term investment performance, as it minimizes the drag on returns. Compared to the industry average, these costs are highly competitive, supporting better net returns over time. Keeping investment costs low is a key strategy for maximizing returns, and this portfolio is well-positioned in that regard. Continually monitoring and managing costs can help maintain this advantage, ensuring that more of your investment returns are retained.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey