A balanced portfolio with a global focus and moderate risk exposure

Report created on Mar 5, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of global equity ETFs, with a significant 70% allocation to the Vanguard FTSE All-World UCITS ETF. This suggests a strong focus on capturing broad market growth. The inclusion of the iShares MSCI World Small Cap and Emerging Markets ETFs adds diversification across different market segments. Such a composition aligns well with a balanced investment strategy, aiming to capture global growth while maintaining a moderate risk profile. To further enhance diversification, consider exploring additional asset classes like bonds or real estate, which could provide stability during market volatility.

Growth Info

Historically, the portfolio has demonstrated robust performance, with a Compound Annual Growth Rate (CAGR) of 10.26%. This indicates solid growth over time, outpacing many traditional savings vehicles. The maximum drawdown of -20% highlights the potential for significant value fluctuations during market downturns. When compared to global benchmarks, this portfolio's performance is commendable, reflecting its diversified nature. However, it's important to remember that past performance is not a guarantee of future results. Regularly reviewing portfolio performance against benchmarks can ensure alignment with investment goals.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, suggests a wide range of possible results. With a 5th percentile outcome of -40.6% and a 50th percentile of 364.4%, the portfolio shows both risk and opportunity. The simulation's annualized return of 15.72% is optimistic, but it's crucial to understand that these are projections based on historical trends. Investors should remain cautious and prepared for varying outcomes. Regularly updating simulations and considering different economic scenarios can provide a clearer picture of potential future performance.

Asset classes Info

  • Stocks
    95%

The portfolio's asset allocation is heavily skewed towards equities at 95%, with no exposure to bonds or alternative assets. This concentration in stocks can drive growth but also increases volatility, especially during market downturns. While the portfolio's diversification across different equity markets is beneficial, incorporating other asset classes could reduce risk and provide a cushion against equity market fluctuations. Bonds, for example, are typically less volatile and can offer stability. Rebalancing the portfolio to include a modest bond allocation could enhance its risk-return profile.

Sectors Info

  • Technology
    22%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation shows a notable concentration in Technology (22%) and Financial Services (16%). This aligns with global market trends but may expose the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. While the diverse sector representation supports broad market exposure, it's essential to monitor sector performance and economic trends that could impact these areas. Diversifying further across underrepresented sectors like Utilities or Real Estate could provide additional stability and mitigate sector-specific risks.

Regions Info

  • North America
    57%
  • Europe Developed
    12%
  • Asia Emerging
    9%
  • Japan
    6%
  • Asia Developed
    6%
  • Africa/Middle East
    2%
  • Australasia
    2%
  • Latin America
    1%

The portfolio has a strong geographic tilt towards North America (57%), with moderate exposure to Europe Developed (12%) and Asia Emerging (9%). This geographic distribution captures growth opportunities in developed markets but may limit exposure to emerging markets' potential. While this allocation aligns with many global benchmarks, increasing diversification into regions like Latin America or Africa/Middle East could enhance growth prospects and reduce reliance on North American markets. Regularly reassessing geographic allocations can help capitalize on shifting global economic trends.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    28%
  • Mid-cap
    18%
  • Small-cap
    8%
  • Micro-cap
    2%

The portfolio's market capitalization distribution is well-balanced, with 38% in mega-cap and 28% in big-cap stocks. This mix provides stability and growth potential as larger companies tend to be more resilient during downturns. However, the 8% allocation to small-cap stocks offers exposure to higher growth opportunities, albeit with increased volatility. Ensuring a balanced mix across market capitalizations can help manage risk while capturing growth. Periodic rebalancing to maintain this balance is advisable, especially in response to market shifts.

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 asset allocation can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This approach focuses on maximizing returns for a given level of risk by adjusting asset weights. While the portfolio is already well-diversified, exploring slight adjustments between existing assets could enhance its efficiency. It's important to note that optimization is based on current holdings and doesn't necessarily account for external factors. Regularly revisiting optimization strategies can ensure the portfolio remains aligned with investment goals.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.22%

With a Total Expense Ratio (TER) of 0.22%, the portfolio maintains impressively low costs, supporting better long-term performance. Lower fees mean more of the portfolio's returns are retained, compounding over time. This cost efficiency aligns with best practices, ensuring that expenses don't erode gains. However, it's important to remain vigilant about any changes in fund fees or additional costs that may arise. Regularly reviewing the cost structure can help maintain this advantage and maximize net returns.

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