Balanced and broadly diversified portfolio with a focus on global equities and moderate risk

Report created on May 10, 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 is composed of two ETFs, with a significant weighting towards the Vanguard FTSE All-World UCITS ETF USD Accumulation, making up 67% of the portfolio, and the iShares MSCI World Small Cap UCITS ETF USD (Acc) accounting for the remaining 33%. This structure indicates a strong tilt towards global equities, leveraging both broad market exposure and the growth potential of small-cap stocks. The allocation across just two ETFs simplifies management but also concentrates the portfolio's performance on the health of the global stock market.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.10%, with a maximum drawdown of -35.65%. These metrics highlight a robust performance with significant volatility, as evidenced by the substantial drawdown. The days contributing 90% of returns being so few suggests that timing the market plays a crucial role in achieving these returns, a strategy that comes with high risk and unpredictability.

Projection Info

Monte Carlo simulations, which run thousands of potential scenarios to predict future performance, suggest a wide range of outcomes for this portfolio. The median projection indicates a potential 219.6% return, with a 67th percentile outcome at 336.7%. However, it's crucial to remember that such simulations rely on historical data, and past performance is not indicative of future results. This method helps in visualizing potential risks and rewards but cannot guarantee specific outcomes.

Asset classes Info

  • Stocks
    100%

The entire portfolio is allocated to stocks, providing no asset class diversification beyond equities. While this maximizes exposure to the growth potential of the stock market, it also exposes the portfolio to higher volatility and risk during market downturns. Diversification across different asset classes, such as bonds or real estate, could offer a buffer against stock market fluctuations.

Sectors Info

  • Technology
    20%
  • Financials
    17%
  • Industrials
    13%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Real Estate
    4%
  • Energy
    4%
  • Utilities
    3%

The sectoral allocation reveals a concentration in technology (20%) and financial services (17%), followed by industrials and consumer cyclicals. This composition reflects a growth-oriented strategy but also introduces sector-specific risks. For instance, the technology sector's performance can be significantly affected by changes in regulatory environments or shifts in consumer preferences.

Regions Info

  • North America
    64%
  • Europe Developed
    16%
  • Japan
    8%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (64%), with lesser exposure to Europe and emerging markets. This distribution suggests a bias towards developed markets, potentially limiting exposure to the growth opportunities present in emerging economies. While this may reduce volatility, it could also limit potential returns from faster-growing regions.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    23%
  • Mid-cap
    23%
  • Small-cap
    17%
  • Micro-cap
    4%

The market capitalization breakdown shows a balanced exposure across mega, big, and medium-sized companies, with a notable allocation to small and micro-cap stocks (21%). This diversification can enhance growth potential but also increases volatility, as smaller companies are often more sensitive to market swings.

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 expected return is below the optimal level that could be achieved with the same risk level, suggesting room for improvement. By adjusting the asset allocation or diversifying further, it's possible to enhance returns without increasing risk. This optimization process involves finding a balance that aligns with the investor's risk tolerance and investment goals.

Ongoing product costs Info

  • iShares MSCI World Small Cap UCITS ETF USD (Acc) 0.35%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.26%

The total expense ratio (TER) of 0.26% is relatively low, which is advantageous for long-term growth as it minimizes the drag on performance caused by fees. Keeping costs low is crucial for maximizing net returns, especially in a portfolio focused solely on equity ETFs.

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