A balanced and highly diversified portfolio with a strategic mix of global equities and bonds

Report created on May 5, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is strategically structured with a 50% allocation to a global equity ETF, 25% to short-term investment-grade bonds, 15% to emerging markets, and 10% to European small caps. This composition reflects a thoughtful balance between growth-oriented assets and income-generating securities, aiming to mitigate volatility while pursuing capital appreciation. The diversification across asset classes and geographies is commendable, aligning well with a balanced risk profile.

Growth Info

Historically, the portfolio has demonstrated robust performance, with a Compound Annual Growth Rate (CAGR) of 12.92%. The maximum drawdown of -25.96% indicates resilience during market downturns, a critical aspect for balanced investors. The concentration of returns in a few significant days highlights the importance of staying invested over attempting to time the market. Compared to benchmarks, this performance suggests effective asset allocation and risk management strategies.

Projection Info

Monte Carlo simulations project a wide range of outcomes, emphasizing the inherent uncertainty in investing. With 951 out of 1,000 simulations yielding positive returns, the portfolio shows a high probability of future growth. However, the significant spread between the 5th and 67th percentiles underscores the importance of maintaining a long-term perspective and being prepared for volatility.

Asset classes Info

  • Stocks
    65%
  • Cash
    14%
  • Bonds
    11%

The portfolio's asset allocation—65% stocks, 14% cash, 11% bonds—supports its balanced classification. This mix aims to capture the growth potential of equities while using bonds and cash to cushion against market fluctuations. The allocation to cash is notably high, suggesting an opportunity to potentially increase returns by reallocating some cash holdings into underrepresented asset classes.

Sectors Info

  • Technology
    16%
  • Financials
    12%
  • Consumer Discretionary
    7%
  • Industrials
    6%
  • Health Care
    6%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

Sectoral allocation reveals a strong emphasis on technology and financial services, combined representing 28% of the portfolio. This concentration in sectors known for volatility but also for significant growth potential suits a balanced strategy aiming for higher returns. However, diversifying into underrepresented sectors could further mitigate risk and smooth out returns over time.

Regions Info

  • North America
    37%
  • Europe Developed
    9%
  • Asia Emerging
    8%
  • Asia Developed
    4%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%

Geographic distribution shows a heavy tilt towards North America (37%) and a moderate exposure to emerging and developed markets in Asia and Europe. This global exposure enhances diversification benefits, reducing the portfolio's vulnerability to region-specific economic downturns. However, the limited exposure to Europe Emerging and Australasia suggests potential areas for further geographic diversification.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    22%
  • Mid-cap
    10%

The portfolio's market capitalization exposure—32% mega, 22% big, 10% medium—indicates a conservative stance, favoring large, established companies likely to offer stability and resilience. While this is suitable for a balanced investor, incorporating a modest allocation to small-cap stocks could enhance growth potential, given their propensity to outperform larger counterparts over the long term.

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-positioned on the Efficient Frontier, indicating an optimal risk-return balance given its current composition. However, continuous monitoring and occasional rebalancing are essential to maintain this efficiency, especially as market conditions and the investor's financial goals evolve.

Ongoing product costs Info

  • Amundi ETF Govies 0-6 Months EuroMTS Investment Grade UCITS ETF DR 0.14%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Xtrackers MSCI Emerging Markets UCITS ETF 1C 0.18%
  • Weighted costs total (per year) 0.16%

With a total expense ratio (TER) of 0.16%, the portfolio is cost-efficient, which is crucial for enhancing long-term returns. Lower costs mean more of the portfolio's gains are retained by the investor, a key factor in compounding wealth. Regularly reviewing costs and considering even lower-cost alternatives for similar strategies could further optimize returns.

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