A globally diversified equity portfolio with a strong focus on developed markets

Report created on Aug 10, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily invested in equities, with a 90% allocation to a broad global ETF and a 10% allocation to emerging markets. The concentration in a single asset class (stocks) and the significant tilt towards developed markets, particularly North America, indicate a strategy aimed at capturing global equity growth while mitigating risk through geographical diversification. The balance between developed and emerging markets is conservative, favoring stability and established economies over the potentially higher returns (and higher volatility) associated with emerging markets.

Growth Info

Historical performance, with a Compound Annual Growth Rate (CAGR) of 12.87% and a maximum drawdown of -25.36%, suggests a strong upward trend tempered by significant volatility. The days contributing to 90% of returns being limited to 38 indicates that a few key periods have driven the bulk of the portfolio's performance. This underscores the importance of long-term holding to capture these critical growth spurts, as timing the market can be exceptionally challenging.

Projection Info

The Monte Carlo simulation, a tool that projects potential future outcomes by randomizing historical data, suggests a wide range of possible future performances. With 986 out of 1,000 simulations showing positive returns, the analysis indicates a high likelihood of future gains. However, the significant spread between the 5th and 67th percentiles highlights the uncertainty and risk inherent in equity investments. Investors should consider these projections as one of many tools in making informed decisions, recognizing the limitations of past performance as a predictor of future results.

Asset classes Info

  • Stocks
    100%

With 100% of the portfolio allocated to stocks, diversification across asset classes is non-existent. This singular focus on equities enhances growth potential but also increases vulnerability to market fluctuations. Diversifying across different asset classes, such as bonds or real estate, could provide a buffer against equity market downturns, potentially reducing volatility without drastically compromising long-term returns.

Sectors Info

  • Technology
    25%
  • Financials
    15%
  • Industrials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation shows a heavy emphasis on technology, financial services, and industrials, which are sectors often associated with robust growth but also higher volatility. The underrepresentation of traditionally defensive sectors like utilities and consumer staples suggests a portfolio designed for growth, albeit with a higher risk profile. Balancing growth-oriented sectors with more defensive ones could help mitigate sector-specific risks.

Regions Info

  • North America
    68%
  • Europe Developed
    14%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic allocation underscores a strong preference for North American and developed European markets, with a modest exposure to emerging markets. This distribution reflects a cautious approach to global diversification, leveraging the stability and growth potential of developed economies. However, increasing exposure to emerging markets could offer higher growth prospects and further diversification benefits.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    35%
  • Mid-cap
    16%

The focus on mega and big-cap stocks (83% combined) indicates a preference for the stability and lower volatility often associated with larger companies. While this can be a prudent strategy, especially in turbulent markets, incorporating a higher proportion of medium-cap stocks could enhance growth potential, as these companies sometimes offer more significant upside during market rallies.

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 structure, heavily weighted towards equities with a focus on developed markets, aligns with a balanced risk-return profile. However, exploring optimization through the Efficient Frontier could identify potential adjustments to improve the risk-return ratio. This might involve diversifying into other asset classes or rebalancing sector and geographic exposures to achieve a more efficient portfolio without necessarily increasing risk.

Ongoing product costs Info

  • iShares MSCI EM UCITS ETF USD (Acc) 0.18%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Weighted costs total (per year) 0.20%

The portfolio's total expense ratio (TER) of 0.20% is impressively low, which is beneficial for long-term growth as costs can significantly erode returns over time. Continuing to prioritize low-cost investment options will support better net performance, aligning with the principle that keeping costs low is one of the few controllable factors in investment success.

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