A two-trick pony galloping across the Atlantic with sights set on modest diversification
Report created on May 6, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
SM iShares Core MSCI Europe UCITS ETF EUR (Acc)
SMEA - IE00B4K48X80 52.00% -
VU Vanguard S&P 500 UCITS Acc
VUAG - IE00BFMXXD54 48.00%
At first glance, this portfolio seems to be playing it safe with a classic transatlantic split, but it's more like putting all your eggs in two slightly different baskets. With 52% in European stocks and 48% in the S&P 500, it's like deciding your diet will consist solely of pizza and burgers because they're different cuisines. While technically diversified across regions, it's a blinkered approach that ignores vast swathes of the global investment landscape.
Growth
Historically, this portfolio has shown a CAGR of 11.47% with a max drawdown of -26.41%, which isn't too shabby. However, let's not get too carried away patting ourselves on the back. These numbers are riding on the coattails of one of the longest bull markets in history. It's like bragging about your driving skills because you didn't crash while driving downhill with the wind at your back.
Projection
Monte Carlo simulations suggest a wide range of outcomes, but leaning on these too heavily is like using a magic 8-ball to plan your retirement. Yes, the majority of simulations show positive returns, but remember, these simulations are as good at predicting the future as I am at winning the lottery. They're a tool, not a crystal ball, and should be taken with a grain of salt.
Asset classes
- Stocks 100%
Having 100% of your portfolio in stocks is like deciding to sprint a marathon; it's bold, but you're going to feel every bump along the way. Sure, stocks have historically provided strong returns, but they also bring you front-row tickets to the rollercoaster of market volatility. A sprinkle of bonds or other asset classes might not be as exciting, but they could save you from some sleepless nights.
Sectors
- Technology 19%
- Financials 18%
- Industrials 13%
- Health Care 13%
- Consumer Discretionary 9%
- Consumer Staples 8%
- Telecommunications 7%
- Energy 4%
- Basic Materials 4%
- Utilities 3%
- Real Estate 2%
The sector spread isn’t terrible, with technology and financial services leading the charge, but it’s a bit like betting on the most popular kids in school to win all the races. Yes, they’re strong performers, but ignoring the underdogs means missing out on potentially rewarding opportunities. Diversifying across more sectors could help smooth out the ride.
Regions
- Europe Developed 51%
- North America 49%
A near-even split between Europe and North America screams of a classic rookie move to appear worldly without actually understanding global markets. It's like owning a map but only ever visiting the countries you've heard of. Emerging markets, anyone? Asia? There's a whole world out there beyond the comfort zone of developed Western markets.
Market capitalization
- Mega-cap 50%
- Large-cap 35%
- Mid-cap 14%
Favoring mega and big caps is like only watching blockbuster movies; you might enjoy consistent entertainment, but you're missing out on indie gems that could really pay off. Sure, these giants offer stability, but mixing in some medium or even a sprinkle of small caps could spice things up and potentially boost returns.
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 Efficient Frontier, this portfolio might be lounging in the middle of the road, not too risky but not exactly maximizing returns either. It's like choosing a sedan for a cross-country road trip; it'll get you there, but you might wonder if there was a more exciting or efficient option.
Ongoing product costs
- iShares Core MSCI Europe UCITS ETF EUR (Acc) 0.20%
- Vanguard S&P 500 UCITS Acc 0.07%
- Weighted costs total (per year) 0.14%
With total TER at 0.14%, at least you're not throwing money out the window on fees. It's one of the few areas where this portfolio doesn't induce a face-palm. It's akin to finding a decent, reasonably priced restaurant in a tourist trap; surprisingly good value amidst potentially questionable choices.
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