A conservative portfolio with a focus on ESG equities and global bonds for steady growth

Report created on Dec 27, 2024

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio consists of three main asset types: equities, bonds, and gold. The Vanguard ESG Global All Cap UCITS ETF makes up 70% of the portfolio, providing substantial exposure to global equities with an emphasis on ESG criteria. The iShares Global Aggregate Bond UCITS ETF accounts for 25%, offering stability through diversified bond holdings. Lastly, iShares Physical Gold ETC holds 5%, adding a layer of protection against inflation and market volatility. This composition aligns with a conservative risk profile by balancing growth potential with stability. Consider reviewing the asset allocation periodically to ensure it remains aligned with your risk tolerance and financial goals.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 7.02%, suggesting steady growth over time. This performance is impressive for a conservative portfolio, particularly given the global equity exposure. The maximum drawdown of -16.33% indicates that while the portfolio is relatively stable, it is still susceptible to market downturns. Understanding that past performance does not guarantee future results, this historical data can provide confidence in the portfolio's ability to generate consistent returns while maintaining a conservative risk level.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, indicates a positive outlook for this portfolio. With 1,000 simulations, the 5th percentile shows a 25.85% return, while the median (50th percentile) projects a 174.23% return. The annualized return across all simulations is 7.79%, suggesting potential for continued growth. It is important to note that these projections are based on historical trends and assumptions, and actual future performance may vary. Regularly reviewing projections and adjusting the portfolio as needed can help manage expectations and align with financial goals.

Asset classes Info

  • Stocks
    70%
  • Bonds
    25%
  • Other
    5%

The portfolio is diversified across three main asset classes: stocks (approximately 70%), bonds (25%), and a small allocation to gold (5%). This allocation provides a balanced approach, with equities driving growth and bonds offering stability. Compared to typical conservative portfolios, this mix leans slightly towards equities, enhancing growth potential while maintaining a solid foundation in bonds. The minor allocation to gold adds a hedge against inflation and market volatility. Ensure that these asset classes align with your risk tolerance and consider adjustments if your financial situation or goals change.

Sectors Info

  • Technology
    21%
  • Financials
    12%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Telecommunications
    6%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Real Estate
    2%
  • Basic Materials
    2%

The sector allocation is notably concentrated in technology (20.55%), followed by financial services (12.44%) and healthcare (8.65%). This concentration aligns with global market trends but may introduce sector-specific risks. A tech-heavy portfolio can experience higher volatility, particularly during economic shifts or regulatory changes. While this sector allocation supports growth, it's important to monitor sector trends and consider rebalancing if any sector becomes overly dominant. Diversifying across more sectors can help mitigate risks and enhance the portfolio's resilience to market fluctuations.

Regions Info

  • North America
    47%
  • Europe Developed
    9%
  • Japan
    4%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (47.26%), with limited exposure to other regions such as Europe Developed (8.68%) and Japan (3.99%). This concentration in North America may benefit from the region's economic stability and growth prospects but could also increase vulnerability to region-specific risks. Expanding exposure to underrepresented regions like Asia or Europe could enhance diversification and reduce geographic risk. Regularly reviewing geographic allocation ensures the portfolio remains aligned with global economic trends and your investment objectives.

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 identifies the best possible risk-return ratio based on current assets. Given its conservative nature, the portfolio already aligns closely with optimal risk-return trade-offs. However, periodically revisiting this optimization can ensure the portfolio remains efficient as market conditions change. Adjustments to asset weights, within the same asset classes, can enhance returns without increasing risk. This ongoing optimization supports achieving financial goals while maintaining the portfolio's conservative risk profile.

Dividends Info

  • iShares Global Aggregate Bond UCITS Dist 1.50%
  • Weighted yield (per year) 0.38%

The portfolio's overall dividend yield is modest at 0.38%, primarily driven by the iShares Global Aggregate Bond UCITS ETF, which yields 1.5%. For a conservative portfolio, dividends can provide a steady income stream, complementing capital appreciation. However, given the focus on ESG equities and bonds, the current yield reflects the portfolio's growth orientation rather than income generation. If income is a priority, consider reallocating towards higher-yielding investments while maintaining the portfolio's risk profile and diversification.

Ongoing product costs Info

  • iShares Global Aggregate Bond UCITS Dist 0.10%
  • Vanguard ESG Global All Cap UCITS ETF (USD) Accumulating 0.24%
  • Weighted costs total (per year) 0.19%

The portfolio's total expense ratio (TER) is 0.19%, which is relatively low and advantageous for long-term performance. Lower costs mean more of your investment returns stay in your pocket, enhancing compounding over time. This cost efficiency aligns well with the conservative risk profile, where minimizing expenses is key to maximizing net returns. Regularly reviewing the cost structure and exploring opportunities to switch to even lower-cost alternatives can further improve the portfolio's efficiency without sacrificing diversification or performance.

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