A cautiously diversified portfolio with a strong focus on global equities and minimal risk exposure

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Cautious Investors

This portfolio suits a cautious investor seeking global equity exposure while maintaining a moderate risk profile. With a long-term investment horizon, the focus is on capital appreciation through diversified market exposure. This strategy is ideal for those comfortable with higher volatility in pursuit of growth, yet it remains mindful of risk management. It's well-suited for individuals looking to build wealth gradually while staying aligned with global market trends.

Positions

  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    VWRA - IE00BK5BQT80
    90.00%
  • iShares Core S&P 500 UCITS ETF USD (Acc)
    CSPX - IE00B5BMR087
    10.00%

This portfolio comprises two ETFs: Vanguard FTSE All-World UCITS ETF (90%) and iShares Core S&P 500 UCITS ETF (10%). The allocation leans heavily toward global equities, providing broad market exposure. Compared to a typical cautious portfolio, this composition is more equity-focused, which may increase risk but also potential returns. Diversification is achieved through a wide range of sectors and regions, yet it remains concentrated in stocks. Consider evaluating the balance between equities and other asset classes to align with a cautious risk profile.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 21.76%, significantly outperforming many benchmarks. This means that a hypothetical initial investment grew substantially over time, demonstrating strong past returns. However, past performance does not guarantee future results. It's crucial to consider that market conditions can change, and maintaining a balanced approach is key. Regularly reviewing performance and adjusting allocations can help sustain growth while managing risk.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance is projected with a range of potential outcomes. These simulations use historical data to estimate future returns, showing that all scenarios resulted in positive returns. The median outcome suggests a substantial growth potential, but it's important to remember that projections are not certainties. Market conditions and unforeseen events can impact actual returns. Regularly updating projections and adjusting strategies accordingly can help manage expectations and risks.

Asset classes Info

  • Stocks
    100%
  • Other
    0%
  • No data
    0%
  • Cash
    0%

The portfolio is entirely invested in stocks, which can offer substantial growth but also higher volatility. While this aligns with the goal of maximizing returns, it may not suit more cautious risk profiles. Typically, a diversified portfolio includes other asset classes like bonds or real estate to mitigate risk. Consider incorporating different asset classes to enhance stability, especially during market downturns, while still aiming for growth.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio's sector allocation shows a notable concentration in technology (27%), followed by financial services (16%) and consumer cyclicals (11%). While this mirrors common benchmarks, it may lead to increased volatility, particularly in tech-heavy markets. Sector diversification can reduce risk by spreading exposure across various industries. Regularly reviewing sector allocations and adjusting them based on market trends and economic conditions can help maintain a balanced risk-return profile.

Regions Info

  • North America
    70%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

With 70% exposure to North America, the portfolio is heavily weighted towards this region, followed by Europe Developed (12%) and Asia Emerging (5%). This geographic concentration can impact diversification, especially if regional markets face downturns. While North America has been a strong performer, diversifying into other regions can reduce potential risks associated with regional economic shifts. Consider increasing exposure to underrepresented regions for a more balanced global allocation.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    35%
  • Mid-cap
    17%
  • Small-cap
    0%
  • Micro-cap
    0%

The portfolio is predominantly invested in mega-cap (47%) and big-cap (35%) stocks, with minimal exposure to medium and small-cap companies. This allocation provides stability and lower volatility, as larger companies tend to be more established. However, it may limit growth potential compared to smaller companies. Balancing exposure across different market capitalizations can enhance diversification and offer opportunities for higher returns, especially in emerging markets.

Ongoing product costs Info

  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.21%

The portfolio's total expense ratio (TER) is 0.21%, which is relatively low and supports better long-term performance by minimizing costs. Keeping fees low is crucial for maximizing net returns, especially over extended investment horizons. Regularly reviewing and comparing fund expenses can help ensure cost-efficiency. This cost structure aligns well with best practices for maintaining a cost-effective portfolio.

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.

The Efficient Frontier suggests a more optimized portfolio could achieve a higher expected return of 24.44% with the same risk level. This involves reallocating current assets for a better risk-return ratio. While optimization can enhance returns, it's essential to consider personal risk tolerance and investment goals. Regularly reassessing the portfolio's alignment with the Efficient Frontier can help maintain optimal performance.

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