A growth-focused portfolio with a strong tilt towards emerging markets and technology
Report created on Oct 27, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
XM Xtrackers MSCI Emerging Markets UCITS ETF 1C
XMME - IE00BTJRMP35 80.00% -
IW iShares Core MSCI World UCITS ETF USD (Acc)
IWDA - IE00B4L5Y983 20.00%
This portfolio predominantly invests in emerging markets (80%) through the Xtrackers MSCI Emerging Markets UCITS ETF, complemented by a 20% allocation in the iShares Core MSCI World UCITS ETF, which targets a global spread excluding emerging markets. The heavy weighting towards emerging markets is atypical for a growth-oriented portfolio, which traditionally might balance more evenly between developed and emerging markets. This configuration suggests a higher risk appetite, aiming for potentially higher returns from the emerging markets' volatility and growth prospects.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.09%, with a maximum drawdown of -35.80%. These figures indicate a relatively high-risk, high-reward profile, typical of heavy exposure to emerging markets. The days contributing to 90% of returns being so few highlights the portfolio's volatility and the importance of timing in such investments. Comparing this performance to a more diversified or developed market-focused portfolio might show less volatility and drawdown.
Projection
Monte Carlo simulations, which use historical data to forecast potential future outcomes, suggest a wide range of possible returns for this portfolio, from 13.9% to 397.5% at key percentiles. While these projections provide a sense of the portfolio's potential, it's crucial to remember that they are based on past performance, which is not a reliable indicator of future results. The high percentage of simulations with positive returns (971 out of 1,000) underscores the portfolio's growth potential, albeit with significant risk.
Asset classes
- Stocks 99%
The portfolio is almost entirely invested in stocks (99%), with negligible cash or other asset classes. This stock-heavy allocation is typical for growth-focused portfolios but comes with higher market risk compared to portfolios with a mix of stocks, bonds, and other assets. Diversifying across more asset classes could reduce volatility and provide a buffer during stock market downturns.
Sectors
- Technology 26%
- Financials 21%
- Consumer Discretionary 13%
- Telecommunications 10%
- Industrials 7%
- Basic Materials 6%
- Health Care 5%
- Consumer Staples 4%
- Energy 4%
- Utilities 2%
- Real Estate 2%
The sector allocation shows a significant tilt towards Technology (26%) and Financial Services (21%), followed by Consumer Cyclicals and Communication Services. This sector distribution is characteristic of growth portfolios but may also increase susceptibility to sector-specific downturns, such as regulatory changes in technology or financial crises.
Regions
- Asia Emerging 39%
- Asia Developed 25%
- North America 16%
- Africa/Middle East 8%
- Latin America 6%
- Europe Developed 4%
- Europe Emerging 2%
- Japan 1%
Geographic exposure is heavily skewed towards Asia Emerging (39%) and Asia Developed (25%), with lesser exposure to North America and minimal allocations to Europe and Australasia. This geographic distribution enhances the portfolio's growth potential but also its geopolitical and currency risks, especially considering the volatility in emerging markets.
Market capitalization
- Mega-cap 56%
- Large-cap 32%
- Mid-cap 10%
The focus on Mega (56%) and Big (32%) cap stocks with a small allocation to Medium cap stocks (10%) suggests a preference for established companies, likely to mitigate some of the risks associated with emerging markets. However, the absence of Small and Micro cap investments limits potential high-growth opportunities from smaller companies.
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 current portfolio's expected return is below the optimal portfolio's expected return of 12.96% at a similar risk level. This suggests that there is room for improvement in allocation to achieve a better risk-return balance. Adjusting the asset allocation could enhance returns without necessarily increasing the portfolio's overall risk.
Ongoing product costs
- iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
- Xtrackers MSCI Emerging Markets UCITS ETF 1C 0.18%
- Weighted costs total (per year) 0.18%
The portfolio benefits from relatively low costs, with Total Expense Ratios (TERs) of 0.20% for the iShares ETF and 0.18% for the Xtrackers ETF. These low costs are advantageous for long-term growth, as they minimize the drag on performance. Cost efficiency is a critical factor in maximizing returns, especially in growth-oriented portfolios where compounding plays a significant role.
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