Balanced and broadly diversified portfolio with a strategic focus on global equities and bonds

Report created on May 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio exhibits a strategic balance between equities (75%) and bonds (25%), with a significant allocation towards the Vanguard S&P 500 UCITS ETF (40%) and substantial investments in European (25%) and global bonds (25%). The inclusion of a modest stake in emerging markets (10%) via the iShares Core MSCI Emerging Markets IMI UCITS ETF adds a layer of geographical diversification. This composition aligns with a balanced risk profile, aiming to mitigate volatility while capturing growth in both developed and emerging markets.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.72%, with a maximum drawdown of -20.30%. These figures suggest a resilient performance through market cycles, with the drawdown indicating the portfolio's vulnerability during market downturns. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing this to benchmark indices can help gauge its relative resilience and growth potential.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, offers a range of potential outcomes. It's important to note, however, that these simulations assume past trends will continue, which may not always be the case. The simulations suggest a median potential growth of 123.1%, with a 5th percentile outcome indicating a possible significant loss. This range underscores the inherent uncertainties in investing and the importance of maintaining a long-term perspective.

Asset classes Info

  • Stocks
    75%
  • Bonds
    25%

The portfolio's asset allocation—75% in stocks and 25% in bonds—is typical of a balanced investment strategy aimed at long-term growth with moderated risk. Stocks, generally more volatile, offer growth potential, whereas bonds can provide income and act as a buffer against stock market volatility. This blend caters to investors seeking a mix of growth and income, with a moderate tolerance for risk.

Sectors Info

  • Technology
    17%
  • Financials
    13%
  • Health Care
    8%
  • Industrials
    8%
  • Consumer Discretionary
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

The sectoral distribution within the portfolio, with the highest allocations in technology, financial services, and healthcare, reflects a focus on industries that potentially offer robust growth. However, heavy concentration in specific sectors, like technology, can introduce sector-specific risks. Diversifying across a broader range of sectors could help mitigate these risks and stabilize returns over time.

Regions Info

  • North America
    40%
  • Europe Developed
    25%
  • Asia Emerging
    5%
  • Asia Developed
    3%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic diversification is evident with significant allocations to North America (40%), developed Europe (25%), and a strategic exposure to emerging markets (10%). This geographical spread can help cushion the portfolio against region-specific economic downturns and capitalize on growth in diverse markets. However, the portfolio's limited exposure to Asia Developed and other emerging regions suggests an opportunity to further diversify and tap into growth potentials outside the current focus areas.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    26%
  • Mid-cap
    12%
  • Small-cap
    1%

The market capitalization breakdown, favoring mega (36%) and big (26%) cap stocks, positions the portfolio towards more established, potentially less volatile companies. While this may offer stability, incorporating a broader mix, including more medium to small-cap stocks, could enhance growth potential, albeit with increased risk.

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 Efficient Frontier analysis could suggest that the portfolio is positioned near the optimal risk-return balance for its current asset mix. However, exploring adjustments in asset allocation could reveal opportunities to further optimize this balance. It's important to remember that such optimizations are based on historical data, which may not perfectly predict future performance.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation 0.10%
  • Vanguard FTSE Developed Europe UCITS ETF EUR Accumulation 0.10%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.10%

The portfolio's overall cost, represented by a Total Expense Ratio (TER) of 0.10%, is impressively low, enhancing its long-term return potential. Costs can significantly impact net returns over time, and maintaining a focus on cost-effective investments, as this portfolio does, supports better long-term performance.

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