Balanced portfolio with strong emphasis on US equities and moderate global diversification

Report created on Aug 15, 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 heavily weighted towards US equities, comprising 80% of the allocation, with European equities at 15%, and emerging markets at a modest 5%. This composition indicates a strong reliance on the performance of the US market, which may offer stability and growth potential but could also limit global diversification benefits. The exclusive investment in ETFs simplifies management and potentially reduces costs, but it also concentrates risk in the equity market, with no allocation to bonds, real estate, or alternative assets for risk mitigation.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 13.94%, which is impressive. However, the maximum drawdown of -32.43% signals significant volatility, likely due to the high concentration in equities and substantial exposure to the US market. The days contributing to 90% of returns being limited to 38 suggests that the portfolio's performance is heavily reliant on a few good days, indicating potential high risk.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, projects a wide range of outcomes, reflecting the inherent uncertainty in predicting stock market performance. The 50th percentile outcome of a 327.2% return is optimistic, yet the broad spread to the 5th percentile at 48.8% underscores the risk involved. The high number of simulations with positive returns (987 out of 1,000) suggests resilience, but investors should remain cautious about the variability in potential outcomes.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, which can offer high growth potential over the long term but also comes with increased volatility and risk. The absence of bonds or other asset classes that typically provide income and stability during market downturns means the investor is fully exposed to equity market fluctuations. Diversifying across different asset classes could help smooth out returns and reduce overall risk.

Sectors Info

  • Technology
    29%
  • Financials
    14%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    3%
  • Basic Materials
    2%
  • Real Estate
    2%

Sectoral allocation shows a heavy tilt towards technology, which comprises 29% of the portfolio. While the tech sector has been a significant growth driver in recent years, this concentration increases vulnerability to sector-specific downturns. The balanced exposure to financial services, consumer cyclicals, healthcare, and industrials is positive, but the portfolio could benefit from greater diversification across sectors to mitigate risk.

Regions Info

  • North America
    80%
  • Europe Developed
    15%
  • Asia Emerging
    2%
  • Asia Developed
    2%

Geographically, the portfolio is predominantly focused on North America (80%) and developed Europe (15%), with minimal exposure to emerging markets (5%). This distribution suggests a conservative approach, prioritizing stability and growth in developed markets. However, increasing exposure to emerging markets could offer higher growth potential and further diversification benefits, albeit with higher risk.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    34%
  • Mid-cap
    16%
  • Small-cap
    1%

The portfolio's market capitalization breakdown reveals a preference for mega (48%) and big (34%) cap stocks, which are typically less volatile than smaller companies. However, the modest allocation to medium (16%) and small (1%) caps limits opportunities for higher returns that these segments may offer. A slight increase in medium and small-cap exposure could enhance growth prospects while introducing manageable risk.

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.

Considering the portfolio's current allocation and risk-return profile, there is room for optimization towards the Efficient Frontier, which could potentially offer a better risk-return ratio. This optimization may involve diversifying across additional asset classes, sectors, and geographies while reassessing the balance between growth potential and volatility. The goal would be to achieve a more efficient portfolio that aligns with the investor's risk tolerance and investment objectives.

Ongoing product costs Info

  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • iShares MSCI EM UCITS ETF USD (Acc) 0.18%
  • iShares Core MSCI Europe UCITS ETF EUR (Acc) 0.20%
  • Weighted costs total (per year) 0.14%

The Total Expense Ratio (TER) of 0.14% is impressively low, which is advantageous for long-term growth as it minimizes the drag on returns. This cost efficiency is a significant strength of the portfolio, allowing more of the investment's returns to compound over time. Maintaining low costs while possibly diversifying further could enhance the portfolio's performance efficiency.

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