Globally diversified stock bond mix with strong stability tilt and impressively low ongoing costs
Report created on May 6, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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VW Vanguard FTSE All-World UCITS ETF USD Accumulation
VWCE - IE00BK5BQT80 80.00% -
VA Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Income
VAGE - IE00BG47KB92 20.00%
The structure is very clear: roughly 80% is in a global stock ETF and 20% in a global bond ETF hedged to euro. This creates a straightforward balanced mix where growth comes mainly from equities while bonds act as a stabiliser. Having just two diversified building blocks keeps things simple and makes it easy to maintain over time. The euro-hedged bond piece also dampens currency swings on the defensive side. Overall, this setup matches very well with a classic balanced allocation, which many investors use as a long‑term core. The big takeaway: it’s a clean, “set‑and‑keep” design rather than a complex trading portfolio.
Growth
Over the measured period, €1,000 grew to about €1,762, which translates into a compound annual growth rate (CAGR) of 8.77%. CAGR is like your average yearly speed on a road trip, smoothing out bumps. This return lagged both the US market and the global equity benchmark, which is normal because a 20% bond slice trades some upside for smoother rides. The maximum drawdown of -27.72% was noticeably smaller than the benchmarks’ deeper falls, showing the cushioning effect of bonds. This is a textbook example of giving up some peak performance in exchange for less extreme downturns. As always, past returns don’t guarantee similar future results.
Asset classes
- Stocks 80%
- Bonds 20%
The 80% stock and 20% bond split is a classic balanced allocation, tilting clearly toward growth while still keeping a defensive anchor. Stocks are the main driver of long‑term returns, while bonds help reduce overall volatility and cushion big drawdowns. Compared with an all‑equity approach, this mix naturally underperforms in very strong bull markets but avoids the deepest pain in crashes. Relative to many global balanced benchmarks, an 80/20 setup is on the growthier side of “balanced,” which suits investors willing to accept some bumps for higher potential returns. This balance is well‑aligned with the stated “Balanced Investor” risk classification and offers a nice compromise between growth and stability.
Sectors
- Technology 21%
- Financials 13%
- Industrials 9%
- Consumer Discretionary 8%
- Health Care 7%
- Telecommunications 7%
- Consumer Staples 4%
- Basic Materials 3%
- Energy 3%
- Utilities 2%
- Real Estate 2%
This breakdown covers the equity portion of your portfolio only.
Sector exposure is broad, with technology the largest slice at 21%, followed by financials, industrials, and consumer‑focused areas, and then smaller allocations to health care, telecoms, and others. This pattern is quite similar to many global equity indices, where tech and related industries naturally dominate because of their huge market values. A tech‑tilt can boost long‑term growth but also adds sensitivity to interest rates and innovation cycles. Importantly, the presence of multiple non‑tech sectors helps smooth out shocks when one industry struggles. The sector mix here aligns closely with standard global equity benchmarks, which is a strong indicator of healthy diversification across different parts of the economy.
Regions
- North America 50%
- Europe Developed 12%
- Japan 5%
- Asia Developed 5%
- Asia Emerging 4%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
This breakdown covers the equity portion of your portfolio only.
Geographically, about half of the equity exposure sits in North America, with smaller but meaningful slices in Europe, Japan, and other developed and emerging regions. This roughly mirrors global market weights, where North America naturally dominates due to the size of its markets. Such a spread reduces reliance on any single country’s economic or political environment. Under‑ or over‑weighting regions can be a valid deliberate choice, but staying near global market weights is a simple, evidence‑based default. This alignment is very positive: it means the portfolio benefits from worldwide growth and innovation without having to guess which region will lead next decade.
Market capitalization
- Mega-cap 39%
- Large-cap 27%
- Mid-cap 13%
This breakdown covers the equity portion of your portfolio only.
The market‑cap breakdown is tilted strongly toward mega‑cap and large‑cap companies, with modest mid‑cap exposure and effectively minimal small‑cap presence. This is exactly how broad global indices are constructed: bigger companies get bigger weights. Larger firms usually bring more stable earnings, better liquidity, and lower business‑specific risk than tiny companies, which helps reduce volatility. On the flip side, small‑caps can offer higher long‑term return potential but with bumpier rides. Here, the heavy focus on mega‑caps contributes to smoother behaviour and supports the portfolio’s balanced risk profile. For someone wanting a simple, core allocation, this market‑cap structure is very much in line with mainstream best practices.
True holdings
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NV NVIDIA Corporation 3.37%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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AA Apple Inc 3.13%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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MS Microsoft Corporation 2.37%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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AM Amazon.com Inc 1.64%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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GO Alphabet Inc Class A 1.48%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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23 Taiwan Semiconductor Manufacturing Co. Ltd. 1.26%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
AV Broadcom Inc 1.20%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
GO Alphabet Inc Class C 1.20%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
-
ME Meta Platforms Inc. 1.15%
Part of fund(s):- Vanguard FTSE All-World UCITS ETF USD Accumulation
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TS Tesla Inc 0.92%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard FTSE All-World UCITS ETF USD Accumulation
- Top 10 total 17.73%
This breakdown covers the equity portion of your portfolio only.
Looking through the top ETF holdings, exposure is dominated by large global names like NVIDIA, Apple, Microsoft, Amazon, Alphabet, and other mega‑cap giants. These companies appear via the global equity ETF, not as separate single‑stock bets, but they still create some concentration in a small group of leaders. Because only top‑10 ETF holdings are used, overlap is almost certainly understated, and a bigger portion of the portfolio probably sits in these same names. This reflects how modern global indices work: a handful of very large firms drive a big share of returns. It’s sensible, but worth remembering that leadership reversals would be felt across many parts of the equity sleeve.
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 very strong tilt toward low volatility, with a score of 96% compared to a neutral 50% baseline. Factor exposure describes how much a portfolio leans into characteristics like value, momentum, or low volatility that research links to returns and risk. A strong low‑volatility tilt means the underlying holdings tend to be more stable than the broad market, often falling less during sharp selloffs but sometimes lagging in explosive rallies. Other factors sit around neutral, so they don’t meaningfully skew behaviour. This powerful stability tilt matches the goal of a balanced, smoother experience and helps explain why drawdowns have been milder than pure equity benchmarks in the historical data.
Risk contribution
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Vanguard FTSE All-World UCITS ETF USD Accumulation
Weight: 80.00% 99.4% -
Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Income
Weight: 20.00% 0.6%
Risk contribution looks at how much each holding drives the portfolio’s overall ups and downs, which can differ from weight. Here, the global equity ETF is 80% by weight but contributes roughly 99% of total risk. The bond ETF, despite its 20% allocation, adds barely more than half a percent of total volatility. This tells you that almost all the portfolio’s risk comes from the stock side, and the bond sleeve’s main role is to trim volatility at the margin. That’s completely normal for a simple two‑fund structure. If someone ever wanted to further reduce risk, adjusting the stock/bond split would be far more impactful than tinkering with the bond ETF itself.
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 mix sits on or very near the efficient frontier, meaning that for its level of volatility, expected return is about as good as you can get using these two funds. The Sharpe ratio of 0.53 is slightly below the max‑Sharpe version at 0.64, but that optimal mix takes more risk. The Efficient Frontier is simply the curve of best achievable return for each risk level with given ingredients. Being right on it is a great sign: it indicates the allocation is already very efficient, and there’s no obvious improvement from reshuffling the same holdings unless you consciously want either more or less overall risk.
Ongoing product costs
- Vanguard Global Aggregate Bond UCITS ETF EUR Hedged Income 0.10%
- Vanguard FTSE All-World UCITS ETF USD Accumulation 0.19%
- Weighted costs total (per year) 0.17%
The average total expense ratio (TER) of about 0.17% is impressively low for a globally diversified, multi‑asset setup. TER is the annual fee charged by the funds, quietly deducted inside the ETF rather than as a separate bill. Lower costs mean more of the gross return stays in your pocket each year, and over decades that difference compounds into a surprisingly large amount. These cost levels are well below many actively managed funds and even cheaper than a lot of “balanced” products sold in retail channels. This cost efficiency strongly supports long‑term performance and is a real strength of the current structure.
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