A tech-focused ESG portfolio with high North American exposure and emphasis on mega-cap stocks

Report created on Aug 1, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio predominantly invests in technology through various ETFs, with a significant 75% allocation to a broad ESG Global All Cap ETF, ensuring a focus on sustainable investing. The remaining 25% is dedicated to specific technology sector ETFs, demonstrating a clear thematic concentration. This structure suggests a strategic attempt to balance a broad, ethical investment approach with a sector-specific focus on technology. However, the heavy allocation towards technology, while potentially offering high growth, also concentrates risk.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 12.62% and a maximum drawdown of -24.41%, the portfolio has demonstrated resilience and growth potential. The days contributing to 90% of returns highlight the impact of significant market movements on performance. While past performance is encouraging, it's essential to remember that it doesn't guarantee future results. The portfolio's risk and return profile should be regularly reviewed against the investor's objectives and market conditions.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes, with the median scenario suggesting substantial growth. However, the reliance on historical data in these simulations means they can't predict future market shifts or the impact of unprecedented events. Diversification and regular rebalancing are crucial to mitigate risks not captured by these projections. Investors should use these simulations as one of many tools in decision-making, not as definitive forecasts.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no presence in bonds, cash, or alternative asset classes. This singular focus enhances growth potential but also increases volatility and risk, especially in market downturns. Diversifying across different asset classes can provide a buffer against stock market volatility, potentially leading to a more stable portfolio performance over time.

Sectors Info

  • Technology
    48%
  • Financials
    14%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    7%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Real Estate
    2%
  • Basic Materials
    2%

With 48% allocated to technology, the portfolio is heavily skewed towards a sector known for its high growth and volatility. While the tech sector can offer significant returns, its performance is sensitive to interest rate changes and economic cycles. Balancing this with investments in less volatile sectors could reduce risk without drastically compromising growth potential.

Regions Info

  • North America
    73%
  • Europe Developed
    11%
  • Japan
    5%
  • Asia Emerging
    4%
  • Asia Developed
    4%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic allocation is heavily weighted towards North America (73%), with limited exposure to emerging markets and other developed regions. This concentration benefits from the robust performance of North American markets, especially in technology. However, increasing exposure to other regions could enhance diversification, potentially reducing risk and tapping into growth opportunities elsewhere.

Market capitalization Info

  • Mega-cap
    50%
  • Large-cap
    29%
  • Mid-cap
    16%
  • Small-cap
    4%
  • Micro-cap
    1%

The focus on mega (50%) and big-cap (29%) companies is a conservative strategy that favors stability and resilience. These companies are typically less volatile than their smaller counterparts. However, incorporating a broader range of market capitalizations, including more mid and small-cap stocks, could enhance growth prospects, albeit with higher risk.

Redundant positions Info

  • Multi Units Luxembourg - Lyxor MSCI World Information Technology TR UCITS ETF
    Xtrackers MSCI World Information Technology UCITS ETF 1C
    iShares MSCI World Information Technology Sector ESG UCITS ETF USD Inc
    iShares S&P 500 USD Information Technology Sector UCITS
    High correlation

The high correlation among the technology-focused ETFs limits the portfolio's diversification benefits. While these investments align with the portfolio's thematic focus, their overlapping holdings increase exposure to sector-specific risks. Reducing redundancy by consolidating these positions or diversifying into other sectors could enhance the portfolio's risk-adjusted returns.

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 configuration, while strong in growth potential, could benefit from diversification beyond highly correlated technology ETFs. Employing the Efficient Frontier concept could identify an optimal mix of assets that maximizes returns for a given level of risk. This might involve broadening the asset base and reducing overlap in technology investments to improve the risk-return profile.

Dividends Info

  • iShares MSCI World Information Technology Sector ESG UCITS ETF USD Inc 0.40%
  • Weighted yield (per year) 0.04%

The portfolio's overall low dividend yield reflects its growth-oriented strategy, which is common in technology investments. While reinvesting dividends can compound growth, investors seeking regular income might consider diversifying into higher-yielding assets or sectors. This could provide a balance between growth and income, catering to a broader range of financial goals.

Ongoing product costs Info

  • iShares MSCI World Information Technology Sector ESG UCITS ETF USD Inc 0.25%
  • Multi Units Luxembourg - Lyxor MSCI World Information Technology TR UCITS ETF 0.30%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Vanguard ESG Global All Cap UCITS ETF (USD) Accumulating 0.24%
  • Xtrackers MSCI World Information Technology UCITS ETF 1C 0.25%
  • Weighted costs total (per year) 0.24%

The portfolio's Total Expense Ratio (TER) of 0.24% is relatively low, which is beneficial for long-term growth as it minimizes the drag on returns. Keeping costs low is crucial in maximizing investment returns, especially in a low-yield environment. Regularly reviewing fund fees and considering cost-effective alternatives can further enhance portfolio efficiency.

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