Balanced Portfolio with Strong Tech Focus and High Geographic Concentration in North America

Report created on Nov 12, 2024

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 composed of two ETFs, with Vanguard FTSE All-World UCITS ETF making up 80% and Xtrackers MSCI World Information Technology ETF accounting for 20%. This composition indicates a strong focus on global equity markets, with a significant tilt towards the technology sector. The allocation suggests a diversified approach, although heavily weighted towards equities, reflecting a balanced risk profile. This setup is generally suitable for investors looking to capture broad market returns while maintaining a specific emphasis on technology-driven growth.

Growth Info

With a historical CAGR of 13.21%, the portfolio has demonstrated strong performance. A hypothetical initial investment would have grown significantly over time, despite a maximum drawdown of -26.5%. The portfolio's ability to recover from downturns and generate returns over the long term is noteworthy. This suggests resilience and potential for growth, albeit with some volatility. Investors should consider their comfort with such fluctuations and ensure alignment with their long-term financial objectives.

Projection Info

A Monte-Carlo simulation, which uses random sampling to predict future outcomes, projects a wide range of potential returns. With a hypothetical initial investment, the 5th percentile predicts a 62.39% return, while the 67th percentile suggests a potential 892.71% return. The median outcome is a 589.62% return. These projections highlight the portfolio's potential for substantial growth but also indicate variability. Investors should be prepared for different scenarios and ensure the portfolio aligns with their risk tolerance and investment horizon.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily concentrated in stocks, with 99.95% of its allocation in equities. This indicates a focus on capital appreciation, suitable for investors seeking growth. However, the lack of diversification across asset classes could expose the portfolio to market volatility. Balancing with other asset classes, such as bonds, could help mitigate risk and provide more stability. Investors should consider their risk tolerance and financial goals when deciding on asset class allocation.

Sectors Info

  • Technology
    40%
  • Financials
    13%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio has a strong sector bias, with 40.16% invested in technology. Other sectors like financial services, healthcare, and consumer cyclicals are also represented. This concentration in technology suggests a bet on the sector's long-term growth prospects. While it provides opportunities for high returns, it also increases exposure to sector-specific risks. Diversifying across more sectors could help reduce risk and enhance stability. Investors should assess their sector preferences and risk appetite.

Regions Info

  • North America
    70%
  • Europe Developed
    13%
  • Japan
    5%
  • Asia Emerging
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, with 70.05% allocation. Other regions like Europe Developed, Japan, and Asia Emerging have smaller allocations. This concentration exposes the portfolio to regional economic conditions and currency fluctuations. While North America has been a strong performer, diversifying into other regions could reduce geographic risk and capture growth opportunities globally. Investors should evaluate their geographic preferences and consider broader diversification.

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 is close to the efficient frontier, indicating an efficient balance between risk and return. While it's not the optimal portfolio, it performs well. The efficient frontier represents portfolios that offer the highest expected return for a given level of risk. Investors could consider adjusting their risk level to better align with their personal preferences. Exploring different allocations could enhance returns without significantly increasing risk.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.18%

The portfolio's costs are relatively low, with the Vanguard FTSE All-World UCITS ETF charging a 0.22% fee and a Total Expense Ratio (TER) of 0.18%. Low costs are beneficial as they enhance net returns over time, aligning with the principle of keeping investment expenses minimal. Investors should continue to monitor fees and ensure they remain competitive. Cost efficiency is a crucial factor in maximizing portfolio performance.

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