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A highly diversified UK-based portfolio with cautious risk and strong global exposure

Report created on Apr 13, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio consists of a mix of equity and bond ETFs, with a notable allocation to a gold ETC. The largest holdings are the Vanguard FTSE All-World and S&P 500 ETFs, comprising 50% of the portfolio. This structure leans towards equities, offering potential growth opportunities while maintaining a cautious risk profile. Compared to typical benchmarks, the portfolio is well-diversified, balancing global equities with fixed income and commodities.

Growth Info

The portfolio's historical performance, with a CAGR of 9.23%, reflects solid growth over time. Despite a maximum drawdown of -19.72%, the portfolio shows resilience, recovering quickly in favorable market conditions. Comparing to benchmarks, this performance indicates effective diversification and risk management. While past performance is no guarantee of future results, the historical trends suggest a well-balanced approach.

Projection Info

The Monte Carlo simulation, which uses historical data to forecast future outcomes, shows a 50th percentile return of 123.6% and a 67th percentile return of 197.8%. This suggests potential for robust growth, though with some downside risk. With 861 out of 1,000 simulations yielding positive returns, the portfolio's cautious risk profile aligns well with growth potential. Remember, simulations are hypothetical and not predictive of actual performance.

Asset classes Info

  • Stocks
    75%
  • Bonds
    15%
  • Other
    10%

The portfolio is allocated across stocks (75%), bonds (15%), and other assets (10%), providing a diversified mix. This allocation offers a balance between growth and stability, aligning with a cautious risk profile. Compared to benchmarks, this portfolio maintains a strong equity presence while incorporating bonds for downside protection. For further diversification, consider exploring additional asset classes.

Sectors Info

  • Technology
    21%
  • Financials
    12%
  • Consumer Discretionary
    7%
  • Industrials
    7%
  • Health Care
    7%
  • Telecommunications
    5%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio's sector allocation is led by technology (21%), followed by financial services (12%) and consumer cyclicals (7%). This tech-heavy focus may lead to higher volatility, especially during interest rate hikes. However, the portfolio's broad sector exposure aligns with diversification goals, mitigating sector-specific risks. Regularly review sector trends to ensure alignment with market conditions and risk tolerance.

Regions Info

  • North America
    48%
  • Europe Developed
    15%
  • Asia Emerging
    4%
  • Asia Developed
    2%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio has significant exposure to North America (48%), with additional allocations to Europe Developed (15%) and Asia Emerging (4%). This distribution offers global diversification, reducing country-specific risks. Compared to benchmarks, the portfolio's geographic spread is well-balanced, though it may benefit from increased exposure to emerging markets for potential growth opportunities.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    24%
  • Mid-cap
    13%
  • No data
    10%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization is skewed towards mega-cap stocks (34%), followed by big caps (24%) and medium caps (13%). This allocation favors stability and established growth, aligning with a cautious risk profile. While smaller caps offer higher growth potential, they also bring increased volatility. Consider adjusting allocations to ensure alignment with long-term growth and risk 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.

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The portfolio can be optimized using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. This approach ensures the portfolio is well-positioned for maximum efficiency. While optimization does not guarantee diversification or other goals, it helps achieve the best possible balance between risk and return. Regularly reassess allocations to maintain this balance.

Dividends Info

  • iShares Core UK Gilts UCITS 3.70%
  • iShares Core £ Corp Bond UCITS ETF GBP (Dist) 4.90%
  • Weighted yield (per year) 0.22%

The portfolio's dividend yield is relatively low at 0.22%, reflecting its focus on growth rather than income. The iShares Core £ Corp Bond ETF offers a higher yield at 4.90%, providing some income stability. For income-focused investors, consider increasing exposure to higher-yielding assets. Ensure dividend strategies align with overall investment goals and risk tolerance.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares Core UK Gilts UCITS 0.07%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • iShares Physical Gold ETC 0.25%
  • iShares Core £ Corp Bond UCITS ETF GBP (Dist) 0.20%
  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation 0.10%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Vanguard FTSE 100 UCITS GBP Acc 0.10%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Weighted costs total (per year) 0.17%

The portfolio's total expense ratio (TER) is 0.17%, indicating low costs that support long-term performance. Compared to industry averages, these costs are impressively low, enhancing net returns. Regularly review and manage costs to ensure they remain competitive. Low costs are a crucial factor in maximizing investment returns over time.

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