A balanced portfolio with a strong technology focus and moderate risk exposure

Report created on Dec 26, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is composed of 80% equity and 20% bonds, with a significant concentration in technology stocks. This structure is typical for a balanced portfolio, which aims to provide growth through equities while maintaining some stability with bonds. However, the heavy weighting in technology stocks may increase volatility. To achieve better diversification, consider spreading investments across more sectors and asset types. This could help mitigate risks associated with sector-specific downturns.

Growth Info

Historically, the portfolio has delivered a robust Compound Annual Growth Rate (CAGR) of 16.73%. This impressive performance suggests strong growth potential, but it also comes with a maximum drawdown of -28.06%, indicating significant risk during downturns. The high CAGR reflects the portfolio's focus on growth sectors like technology. Be aware that past performance does not guarantee future results, and it may be wise to prepare for potential volatility by ensuring the portfolio aligns with your risk tolerance.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future performance, indicates a median return of 508.86% over the investment horizon. This suggests strong potential growth, with 999 out of 1,000 simulations showing positive returns. However, the 5th percentile result of 136.76% highlights the range of possible outcomes. Remember, these projections are based on past data and do not account for unforeseen market changes. Regularly review your portfolio to ensure it remains aligned with your goals and risk tolerance.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%

The portfolio's asset allocation includes 79.82% in stocks and 19.51% in bonds. This mix offers growth potential from equities and some stability from bonds. Compared to typical balanced portfolios, which often have a more even split, this portfolio leans heavily toward equities. While this can drive higher returns, it also increases risk. To enhance diversification, consider adding other asset classes, such as real estate or commodities, which can provide additional stability and growth opportunities.

Sectors Info

  • Technology
    53%
  • Consumer Discretionary
    6%
  • Financials
    5%
  • Health Care
    4%
  • Telecommunications
    4%
  • Industrials
    3%
  • Consumer Staples
    2%
  • Energy
    1%
  • Real Estate
    1%
  • Basic Materials
    1%

With 53.07% allocated to technology, the portfolio is heavily concentrated in this sector. This can lead to higher returns during tech booms but also exposes the portfolio to significant risk if the sector underperforms. The remaining allocation is spread across various sectors, but none exceed 6%. Consider diversifying into other sectors to reduce dependence on technology. This could help balance the portfolio's risk and return profile, providing more resilience against sector-specific downturns.

Regions Info

  • North America
    79%
  • Europe Developed
    1%

The portfolio has a strong geographic bias towards North America, with 79.27% exposure. This concentration can limit diversification benefits and increase vulnerability to regional market fluctuations. While North America offers robust growth opportunities, consider increasing exposure to other regions like Europe and Asia to enhance diversification. This could provide a buffer against regional downturns and capture growth opportunities in emerging markets, aligning with global benchmark allocations.

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 portfolio's current allocation is not optimized along the Efficient Frontier, which represents the best possible risk-return ratio. By adjusting the allocation between existing assets, you could potentially enhance returns for the same level of risk or reduce risk for the same level of return. This optimization focuses on improving the portfolio's efficiency rather than diversification. Regularly review and adjust allocations to maintain an optimal balance in line with your risk tolerance and investment goals.

Ongoing product costs Info

  • iShares MSCI World SRI UCITS ETF EUR (Acc) 0.23%
  • iShares Core Corporate Bond UCITS 0.20%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Weighted costs total (per year) 0.19%

The portfolio's Total Expense Ratio (TER) of 0.19% is impressively low, supporting better long-term performance by minimizing costs. Keeping expenses low is crucial for maximizing returns, as high fees can erode gains over time. This cost efficiency aligns well with best practices for maintaining a healthy portfolio. Continue to monitor costs and consider replacing higher-fee assets with lower-cost alternatives if they arise, ensuring the portfolio remains cost-effective.

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