A cautious portfolio with heavy gold allocation and global equity exposure
Report created on Dec 18, 2024Risk profile
3/7
Diversification profile
4/5
Positions
-
4G Xetra-Gold
4GLD - DE000A0S9GB0 58.71% -
VG Vanguard FTSE All-World UCITS ETF
VGWL - IE00B3RBWM25 41.29%
The portfolio is composed of two main ETFs: Xetra-Gold, which makes up 58.71%, and Vanguard FTSE All-World UCITS ETF at 41.29%. This structure leans heavily towards gold, providing a hedge against market volatility and inflation. The remaining allocation in the Vanguard ETF offers exposure to global equities, which can drive growth. This combination suggests a balanced approach, aiming to protect capital while participating in global market growth. To enhance diversification, consider adding other asset classes like bonds or real estate, which could provide additional stability and income.
Growth
Historically, the portfolio has shown a compound annual growth rate (CAGR) of 12.62% with a maximum drawdown of -17.78%. This indicates a strong growth trajectory with moderate risk exposure. Understanding past performance is crucial as it helps set expectations for future returns. However, it's important to remember that past performance does not guarantee future results. To mitigate risk, consider diversifying further within equities or adding other asset classes to balance potential downturns.
Projection
Monte Carlo simulations, which use historical data to predict future outcomes, suggest a wide range of potential returns. With an annualized return of 13.55% across 1,000 simulations, the portfolio shows a strong likelihood of positive performance. However, these projections are based on past data and market conditions, which may not repeat. To better prepare for future uncertainties, consider reviewing your portfolio periodically and adjusting allocations based on changing market dynamics and personal financial goals.
Asset classes
- Stocks 41%
The portfolio is heavily weighted towards gold, with 58.71% in the Xetra-Gold ETF, and 41.27% in global stocks through the Vanguard ETF. This allocation provides a blend of stability and growth potential. Gold acts as a safe haven during market turbulence, while equities can offer capital appreciation. However, this limited asset class diversity could expose the portfolio to specific risks. To enhance diversification and reduce risk, consider incorporating fixed income or alternative investments that align with your risk tolerance and objectives.
Sectors
- Technology 11%
- Financials 7%
- Health Care 4%
- Consumer Discretionary 4%
- Industrials 4%
- Telecommunications 3%
- Consumer Staples 2%
- Energy 2%
- Basic Materials 2%
- Utilities 1%
- Real Estate 1%
The portfolio's sector allocation is diverse, with technology leading at 10.59%, followed by financial services, healthcare, and consumer cyclicals. This spread helps mitigate sector-specific risks, ensuring that downturns in one sector don't overly impact the entire portfolio. However, the lack of significant exposure in sectors like energy or real estate may limit potential gains in those areas. To achieve a more balanced sectoral exposure, consider reallocating some equity holdings to underrepresented sectors that align with long-term economic trends.
Regions
- North America 27%
- Europe Developed 6%
- Asia Emerging 2%
- Japan 2%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
Geographically, the portfolio is predominantly exposed to North America at 27.06%, with additional allocations in Europe and Asia. This geographic spread provides access to different economic conditions and growth opportunities. However, the limited exposure to emerging markets may restrict potential high-growth opportunities. To enhance geographic diversification and tap into emerging market growth, consider increasing allocations in regions like Latin America or Africa, keeping in mind the associated risks and volatility.
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 can be optimized using the Efficient Frontier, which seeks to achieve the best possible risk-return ratio. This involves adjusting the current asset allocations to maximize returns for a given level of risk. While the current portfolio is broadly diversified, there may be opportunities to improve efficiency by reallocating within existing holdings. Regularly reviewing and rebalancing your portfolio can help maintain an optimal risk-return balance, ensuring it continues to align with your financial goals and market conditions.
Dividends
- Vanguard FTSE All-World UCITS ETF 0.90%
- Weighted yield (per year) 0.37%
The portfolio's dividend yield is relatively low, with the Vanguard FTSE All-World UCITS ETF yielding 0.9%. Dividends can provide a steady income stream and are an important component of total returns, especially in volatile markets. While the current yield may be modest, reinvesting dividends can enhance compounding over time. To increase income potential, consider adding higher-yielding assets or dividend-focused funds, balancing the need for income with your overall risk tolerance and growth objectives.
Ongoing product costs
- Vanguard FTSE All-World UCITS ETF 0.22%
- Weighted costs total (per year) 0.09%
The portfolio's costs are relatively low, with the Vanguard FTSE All-World UCITS ETF having a Total Expense Ratio (TER) of 0.22%. Keeping costs low is crucial for maximizing long-term returns, as high fees can erode gains over time. Regularly reviewing and comparing fees across similar investment options can help ensure you're getting the best value. To further reduce costs, consider exploring other low-cost ETFs or index funds that align with your investment strategy and risk profile.
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