Balanced global ETF portfolio with a strategic focus on diversification and risk management

Report created on Aug 25, 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 structured around a core-satellite approach, predominantly invested in a broad-based global equity ETF, complemented by factor-specific and regional ETFs. The majority allocation to the iShares Core MSCI World UCITS ETF underscores a preference for diversified exposure to global equities, while the inclusion of momentum, value, emerging markets, and small-cap ETFs suggests a nuanced approach to capturing growth, value, and geographical opportunities. This composition aligns with a balanced risk profile, aiming to mitigate volatility through diversification across market segments.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 12.20%, the portfolio has demonstrated robust growth. The maximum drawdown of -25.46% indicates resilience during market downturns, a critical aspect for balanced investors. The concentration of returns in a limited number of days highlights the importance of staying invested over the long term to capture significant market movements. Comparing these metrics to relevant benchmarks would provide further context on performance relative to the broader market.

Projection Info

Using a Monte Carlo simulation, which projects future returns based on historical data, the portfolio shows a wide range of potential outcomes. While past performance is not a reliable indicator of future results, the simulation suggests a strong likelihood of positive returns, with a median projected increase of 246.9%. Such analyses help in understanding potential volatility and assessing risk versus reward, though they carry the caveat of relying on historical patterns that may not repeat.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive allocation to stocks, spanning various geographies and sectors, reflects a growth-oriented strategy within a balanced risk framework. While this provides significant upside potential, the absence of other asset classes like bonds or commodities limits opportunities for risk reduction and income generation through diversification. Including different asset classes could enhance the portfolio's resilience against market fluctuations.

Sectors Info

  • Technology
    24%
  • Financials
    18%
  • Industrials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The sectoral allocation, with a heavy emphasis on technology and financial services, positions the portfolio to benefit from growth in these dynamic sectors. However, this concentration also exposes it to sector-specific risks, such as regulatory changes or economic cycles affecting these industries. Balancing the sector exposure by incorporating underrepresented sectors could mitigate this risk while potentially unlocking new growth avenues.

Regions Info

  • North America
    66%
  • Europe Developed
    18%
  • Japan
    7%
  • Asia Developed
    3%
  • Asia Emerging
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%

The geographic distribution, with a dominant North American exposure, reflects a common bias towards developed markets, particularly the US. While this focus capitalizes on the stability and growth of mature economies, the modest allocation to emerging markets and other developed regions may limit exposure to high-growth potential outside the US. Increasing diversification across geographies could reduce regional risk and tap into emerging market growth.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    36%
  • Mid-cap
    17%
  • Small-cap
    3%
  • Micro-cap
    1%

The market capitalization breakdown shows a preference for mega and big-cap stocks, which tend to be more stable and less volatile than their smaller counterparts. This is consistent with the portfolio's balanced risk profile. However, the relatively small allocation to small and micro-cap stocks may limit potential high-growth opportunities. A slight adjustment to include more small and micro-cap exposure could enhance growth prospects while introducing manageable risk.

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 appears well-constructed within its risk-return framework but may benefit from optimization towards the Efficient Frontier. This would involve adjusting allocations to achieve the best possible risk-return ratio, potentially by diversifying across more asset classes or rebalancing sector and geographic exposures. Such optimization requires continuous review and adjustment in response to market changes and investment goals.

Ongoing product costs Info

  • iShares Edge MSCI World Momentum Factor UCITS ETF 0.30%
  • iShares MSCI World Value Factor UCITS 0.30%
  • iShares MSCI EM UCITS ETF USD (Acc) 0.18%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Weighted costs total (per year) 0.23%

The total expense ratio (TER) of 0.23% is relatively low, enhancing net returns for investors. Keeping costs low is crucial for long-term investment success, as even small differences in fees can have a significant impact over time. The portfolio's cost efficiency is a positive aspect, demonstrating prudent selection of ETFs.

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