A balanced portfolio with a strong tech focus and moderate global diversification

Report created on Jan 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed mainly of equity ETFs, with a significant portion allocated to the iShares NASDAQ 100 UCITS ETF, accounting for 45% of the portfolio. The remaining is split between iShares MSCI World Value Factor UCITS (35%) and iShares MSCI World Small Cap UCITS ETF (20%). This composition leans heavily towards growth-oriented equities, with a notable emphasis on large-cap technology stocks. Compared to common balanced benchmarks, this portfolio is more concentrated in equities, which can offer higher growth potential but also increase volatility. Consider diversifying with bonds or other asset classes to balance risk and return.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 14.79%, outperforming many traditional balanced benchmarks. However, it has also experienced a maximum drawdown of -32.15%, highlighting its susceptibility to market downturns. While past performance is not indicative of future results, these figures suggest a high-growth potential with considerable risk. Investors should be prepared for potential volatility and ensure their risk tolerance aligns with the portfolio's historical performance characteristics.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. The median projection estimates a 417.94% increase, with 989 out of 1,000 simulations yielding positive returns. However, the 5th percentile shows a potential decrease of 73.89%, emphasizing the inherent uncertainty in projections. While these simulations provide insight into possible future performance, remember they rely on historical trends and do not guarantee outcomes. Regularly reviewing and adjusting the portfolio can help manage risk.

Asset classes Info

  • Stocks
    100%

The portfolio is predominantly invested in stocks, with a minimal allocation to cash and other assets. This heavy equity focus can drive growth but may also increase exposure to market volatility. Compared to typical balanced portfolios, which often include bonds or other fixed-income assets, this allocation is more aggressive. To enhance diversification and potentially reduce risk, consider incorporating additional asset classes like bonds or real estate, which can provide stability during market fluctuations.

Sectors Info

  • Technology
    34%
  • Consumer Discretionary
    13%
  • Telecommunications
    11%
  • Industrials
    10%
  • Financials
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Energy
    3%
  • Utilities
    2%

The portfolio is heavily weighted towards the technology sector, comprising over 34% of the allocation. While this sector has historically driven strong returns, it also tends to be more volatile, particularly during economic shifts or interest rate changes. The remaining allocation is spread across various sectors, including consumer cyclicals and communication services. Consider rebalancing to reduce concentration risk in technology and enhance exposure to more defensive sectors, which can offer stability during downturns.

Regions Info

  • North America
    72%
  • Europe Developed
    15%
  • Japan
    10%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily skewed towards North America, making up over 72% of the allocation. This concentration may limit exposure to growth opportunities in other regions, such as emerging markets. While North American markets have been strong performers, diversification across different geographies can help mitigate regional risks and tap into global growth. Consider gradually increasing exposure to underrepresented regions like Asia or Europe to enhance geographic diversification and potentially boost 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 current portfolio can be optimized using the Efficient Frontier, a concept that helps identify the best possible risk-return ratio for a given set of assets. By adjusting the allocation among existing assets, it's possible to achieve a more efficient balance. This doesn't necessarily mean adding new assets but rather rebalancing to enhance returns while managing risk. Regularly reassessing the portfolio's position on the Efficient Frontier can ensure it remains aligned with the investor's risk tolerance and return objectives.

Ongoing product costs Info

  • iShares MSCI World Value Factor UCITS 0.30%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • Weighted costs total (per year) 0.34%

The portfolio's total expense ratio (TER) is approximately 0.34%, which is competitive for a predominantly equity-based portfolio. Managing costs is crucial for long-term performance, as high fees can erode returns over time. This TER aligns well with industry standards, indicating efficient cost management. To further optimize, periodically review the expense ratios of the ETFs and consider lower-cost alternatives if available, ensuring that cost efficiency is maintained without compromising on performance.

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