A tech-driven portfolio with substantial North American exposure and strong historical performance

Report created on Jan 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards stocks, with a significant allocation to ETFs focusing on global markets and technology. The Vanguard FTSE All-World ETF forms the backbone, providing broad market exposure. This composition aligns well with balanced portfolios, which typically mix global equities to manage risk and return. However, it's crucial to ensure that this heavy reliance on equities aligns with the investor's risk tolerance. Consider diversifying further by incorporating other asset classes, such as bonds, to potentially reduce volatility.

Growth Info

Historically, the portfolio has delivered impressive returns, with a CAGR of 17.42%. This indicates strong growth over time, outperforming many traditional benchmarks. However, it's important to note the maximum drawdown of -24.42%, which highlights potential volatility. Past performance is not indicative of future results, so while these returns are promising, they come with inherent risks. To mitigate potential downturns, consider strategies like dollar-cost averaging or maintaining a cash reserve for market opportunities.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance was projected with 1,000 scenarios. The median outcome suggests a substantial return of 1,094.32%. However, simulations show a wide range of outcomes, reflecting market unpredictability. It's important to remember that these projections are based on historical data, and actual future performance may vary. Regularly review the portfolio to ensure it aligns with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly invested in stocks, with minimal exposure to other asset classes like cash. This concentration can lead to higher volatility, especially during market downturns. Balanced portfolios often include bonds or real estate to provide stability and income. Assess whether adding non-equity assets could enhance diversification and reduce risk. A more balanced asset mix can help smooth returns over time and provide a buffer against stock market fluctuations.

Sectors Info

  • Technology
    50%
  • Financials
    11%
  • Telecommunications
    8%
  • Consumer Discretionary
    7%
  • Health Care
    6%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio is heavily concentrated in technology, accounting for over 50% of the allocation. This sector can offer high growth but also comes with increased volatility, especially during economic shifts or regulatory changes. While other sectors like financial services and healthcare provide some diversification, consider increasing exposure to underrepresented areas to balance potential risks. A more evenly distributed sector allocation can help mitigate sector-specific downturns and enhance overall stability.

Regions Info

  • North America
    73%
  • Europe Developed
    12%
  • Asia Developed
    6%
  • Japan
    4%
  • Asia Emerging
    4%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily skewed towards North America, which comprises over 72% of the allocation. While this region has historically strong performance, such concentration can increase vulnerability to regional downturns. Expanding exposure to other regions, such as emerging markets or Europe, could enhance diversification and tap into different economic growth drivers. A more balanced geographic allocation can help hedge against region-specific risks and capture global opportunities.

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's current configuration may benefit from risk-return optimization using the Efficient Frontier. This concept helps identify the best possible risk-return ratio for a given set of assets. By adjusting the allocation between existing assets, you can potentially enhance returns without significantly increasing risk. Regularly rebalancing and reviewing allocations can help maintain an optimal risk-return balance, ensuring the portfolio remains aligned with investment objectives.

Ongoing product costs Info

  • VanEck Semiconductor UCITS ETF 0.35%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Xtrackers Artificial Intelligence &Big Data UCITS ETF 1C 0.35%
  • Weighted costs total (per year) 0.27%

With a Total Expense Ratio (TER) of 0.27%, the portfolio's costs are relatively low, which is favorable for long-term performance. Lower costs mean more of your returns are retained, compounding over time. However, always remain vigilant about fees, as they can erode returns over the long run. Regularly review and compare with similar products to ensure cost efficiency. If possible, explore opportunities to lower expenses further by considering alternative low-cost funds or ETFs.

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