This portfolio has only about 7.1 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced Broadly Diversified Portfolio with Strong Performance and Moderate Costs

Report created on Jul 24, 2024

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 composed of two main ETFs: iShares Core MSCI World UCITS ETF USD (Acc) at 70% and Xtrackers MSCI Emerging Markets UCITS ETF 1C at 30%. This composition shows a strong tilt towards global equities, with a significant portion allocated to emerging markets. Such a mix is indicative of a balanced approach, aiming to capture growth from developed markets while also tapping into the potential of emerging economies. To further stabilize the portfolio, it might be beneficial to consider adding a small portion of bonds or other fixed-income assets.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 9.75%. However, it has also experienced a significant max drawdown of -32.96%, indicating potential volatility during market downturns. This historical insight is crucial as it reflects both the growth potential and the risks involved. To mitigate future drawdowns, it may be wise to consider diversifying further into less volatile asset classes. This will help balance the high returns with a more stable growth trajectory.

Projection Info

Using a Monte Carlo simulation with 1,000 runs, the portfolio shows a wide range of potential outcomes. The median (50th percentile) end portfolio value is projected to grow by 198.16%, with an annualized return of 9.24%. The 5th percentile projects a 6.65% return, while the 67th percentile projects 287.98%. This simulation helps in understanding the potential future performance and associated risks. To prepare for various market conditions, it’s advisable to periodically review and possibly rebalance the portfolio based on changing market dynamics.

Asset classes Info

  • Stocks
    70%
  • No data
    30%

The portfolio is primarily invested in stocks (69.6%), with a notable portion (30%) in an unknown category, possibly due to classification issues. A negligible amount is allocated to cash and bonds. This heavy equity weighting aligns with a growth-oriented strategy but exposes the portfolio to higher volatility. To enhance stability, it might be prudent to allocate a small percentage to bonds or other fixed-income securities. This diversification can help cushion against market volatility and provide more consistent returns.

Sectors Info

  • No data
    30%
  • Technology
    17%
  • Financials
    10%
  • Health Care
    8%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Telecommunications
    5%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is quite diverse, with significant investments in Technology (16.89%), Financial Services (10.50%), and Healthcare (8.37%). This spread across various sectors helps in mitigating sector-specific risks. However, 30% of the portfolio is categorized as unknown, which could skew the perceived diversification. Regularly reviewing sector allocations and ensuring transparency in all holdings can provide a clearer picture of the portfolio’s risk exposure. Adjusting sector weights to reflect market conditions can also enhance overall performance.

Regions Info

  • North America
    52%
  • No data
    30%
  • Europe Developed
    12%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America (51.51%) and includes significant exposure to Europe Developed (12.15%) and Japan (4.23%). The 30% unknown allocation might represent emerging markets or other regions. This geographic diversification helps in capturing global growth opportunities but also exposes the portfolio to regional risks. To optimize geographic allocation, it’s important to regularly assess the performance and economic conditions of different regions. This can help in making informed adjustments to the portfolio.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Weighted costs total (per year) 0.14%

The total expense ratio (TER) for the portfolio is quite low at 0.14%, with the iShares Core MSCI World UCITS ETF USD (Acc) costing 0.2%. Low costs are advantageous as they help in maximizing net returns. Keeping investment costs low is a fundamental principle for long-term growth. Regularly reviewing and comparing expense ratios of different funds can ensure that the portfolio remains cost-efficient. This practice helps in enhancing overall returns by minimizing unnecessary expenses.

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