Globally diversified stock portfolio with strong low volatility tilt and efficient risk adjusted profile
Report created on Apr 29, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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EU iShares Core MSCI World UCITS ETF USD (Acc) EUR
EUNL - IE00B4L5Y983 70.00% -
IS iShares Core MSCI Emerging Markets IMI UCITS
IS3N - IE00BKM4GZ66 30.00%
The structure is very simple and clean: 70% in a global developed equity ETF and 30% in an emerging markets equity ETF. That means every dollar is in stocks, split between more mature markets and faster-growing but bumpier markets. This kind of “core plus satellite” layout is easy to understand and maintain, and it naturally evolves with global markets as the indexes change. The main implication is that returns will closely track broad global equities, with an intentional extra tilt toward emerging economies. For someone wanting long-term growth with straightforward upkeep, this is a solid, transparent setup that avoids unnecessary complexity while still being nicely diversified across thousands of companies.
Growth
From 2016 to 2026, $1,000 grew to about $2,731, a compound annual growth rate (CAGR) of 10.49%. CAGR is the “average speed” of growth per year, smoothing out ups and downs. The worst drop from a peak, the max drawdown, was about -33.15%, which is in line with the big global equity drawdowns in that period. The portfolio lagged the US market but was only slightly behind the global market, which is reasonable given the lean into emerging markets. The key takeaway: this has behaved like a solid global equity allocation, with drawdowns consistent with a balanced-risk stock portfolio.
Asset classes
- Stocks 100%
The allocation is 100% stocks, with no bonds, cash, or alternatives. That’s a clear growth-oriented stance, and it explains why both returns and drawdowns are equity-like. Without bonds or other dampeners, short-term swings can be large, but long-run return potential is higher than in mixed stock–bond portfolios. For someone with many years ahead and a steady income, this approach can work well. For goals with shorter horizons or where capital stability is critical, adding some defensive assets could smooth the ride. As it stands, this is a straightforward equity engine designed primarily for wealth growth rather than income or capital preservation.
Sectors
- Technology 28%
- Financials 17%
- Industrials 11%
- Consumer Discretionary 10%
- Telecommunications 8%
- Health Care 8%
- Consumer Staples 5%
- Basic Materials 4%
- Energy 4%
- Utilities 3%
- Real Estate 2%
Sector exposure is dominated by technology at 28%, followed by financials, industrials, consumer discretionary, telecom, health care, and smaller slices in energy, utilities, and real estate. This split looks broadly similar to many global equity benchmarks, which is a strong indicator of healthy diversification. The tilt toward tech fits the modern global economy, but it does mean more sensitivity to interest rate changes and innovation cycles. If tech goes through a rough patch, the portfolio may feel it more than a perfectly equal-sector mix. Still, the presence of meaningful weights in defensive areas like health care, staples, and utilities helps balance cyclicality.
Regions
- North America 52%
- Asia Developed 13%
- Asia Emerging 12%
- Europe Developed 12%
- Japan 4%
- Africa/Middle East 3%
- Latin America 2%
- Australasia 1%
- Europe Emerging 1%
Geographically, about 52% is in North America, with the rest spread across developed Asia, emerging Asia, Europe, Japan, and smaller allocations to Africa, Latin America, and Australasia. This is well-balanced and aligns closely with global standards for a world-plus-emerging setup. The North American bias reflects the reality that many of the world’s largest listed companies are there, not an active bet. Significant emerging exposure adds growth potential and diversification, though it can add volatility around local political and currency events. Overall, this geographic mix reduces reliance on any single country, which is a big positive for long-term resilience.
Market capitalization
- Mega-cap 50%
- Large-cap 33%
- Mid-cap 16%
- Small-cap 1%
Around 50% is in mega-caps, 33% in large-caps, 16% in mid-caps, and 1% in small-caps. That profile is classic market-cap weighting: heavily anchored in big, established companies but still exposed to mid-sized growth stories. Mega- and large-caps tend to be more stable and profitable, which generally reduces extreme volatility compared with a portfolio stuffed with small-caps. The relatively modest small-cap share means less exposure to the more speculative, higher-risk end of the market. For many investors, this is a comfortable balance: enough breadth to capture global growth, but with the bulk of capital in companies with proven business models and liquidity.
True holdings
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NV NVIDIA Corporation 3.53%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 3.49%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
AA Apple Inc 3.18%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
MS Microsoft Corporation 2.27%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AM Amazon.com Inc 1.66%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
00 Samsung Electronics Co Ltd 1.57%
Part of fund(s):- iShares Core MSCI Emerging Markets IMI UCITS
-
GO Alphabet Inc Class A 1.49%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
GO Alphabet Inc Class C 1.24%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
AV Broadcom Inc 1.18%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
-
ME Meta Platforms Inc. 1.16%
Part of fund(s):- iShares Core MSCI World UCITS ETF USD (Acc) EUR
- Top 10 total 20.78%
Looking through the ETFs, the biggest underlying exposures are familiar global giants like NVIDIA, TSMC, Apple, Microsoft, Amazon, Samsung, Alphabet, Broadcom, and Meta. Several of these appear via multiple index funds, so there is some hidden concentration in mega-cap technology and communication-related names. That’s normal in cap-weighted global indexes, where the largest companies naturally dominate. Because only top-10 ETF holdings are captured, true overlap is actually higher, but not in a problematic way. The main point: even with just two funds, there’s meaningful exposure to the world’s dominant businesses, which helps explain both strong growth and sensitivity to big tech cycles.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows a high tilt to value (63%) and a very high tilt to low volatility (83%), with size, momentum, quality, and yield all near neutral or slightly low. Factors are like “ingredients” that drive returns, and a strong low-volatility tilt means the holdings, on average, have historically been more stable than the market. This can help cushion downturns, though it may lag in wild risk-on rallies. The value tilt suggests a leaning toward cheaper stocks relative to fundamentals, which historically has added return over very long periods but can underperform growth-led bull markets. Together, these tilts create a calmer, valuation-aware equity profile.
Risk contribution
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iShares Core MSCI World UCITS ETF USD (Acc) EUR
Weight: 70.00% 68.5% -
iShares Core MSCI Emerging Markets IMI UCITS
Weight: 30.00% 31.5%
Risk contribution looks at how much each holding actually drives portfolio ups and downs, which can differ from simple weights. Here, the developed markets ETF is 70% of the portfolio and contributes about 68.48% of total risk, while the emerging markets ETF is 30% and contributes 31.52%. Those ratios are very close to their weights, meaning risk is nicely aligned with allocation. There isn’t a hidden “problem child” position dominating volatility. For ongoing management, keeping this general balance—where risk contribution roughly matches weights—helps ensure the portfolio behaves as intended and avoids unintended concentration in any single building block.
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.
On the risk–return chart, the current portfolio has a Sharpe ratio of 0.61, with expected return around 11.17% and volatility about 15.14%. The Sharpe ratio measures return per unit of risk—higher is better. The optimal and minimum-variance portfolios, built from the same two funds, have slightly higher Sharpe ratios, but the differences are small and the current allocation sits effectively on the efficient frontier. That means, given these two building blocks, the mix is already very efficient for its risk level. There’s no clear sign that a different weighting would massively improve risk-adjusted returns, which is a strong vote of confidence in the existing split.
Ongoing product costs
- iShares Core MSCI World UCITS ETF USD (Acc) EUR 0.20%
- iShares Core MSCI Emerging Markets IMI UCITS 0.18%
- Weighted costs total (per year) 0.19%
The total ongoing cost, or TER, is about 0.19%, which is impressively low. TER (Total Expense Ratio) is the annual fee charged by the funds, and even small differences add up over decades. Paying under 0.2% for broad global and emerging market exposure is highly efficient and compares very favorably to typical active funds charging 0.7–1% or more. Keeping costs this low means more of the portfolio’s return stays in your pocket rather than going to fund managers. This cost discipline is a major strength and strongly supports better long-term performance, especially when combined with broad diversification and a long holding period.
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