A cautious portfolio with a strong global equity focus and gold for stability

Report created on Jan 10, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists of 80% in the iShares Core MSCI World UCITS ETF, providing broad exposure to global equities, and 20% in the iShares Physical Gold ETC, offering a hedge against market volatility. This composition aligns with a cautious investor profile, emphasizing stability with a moderate growth potential. Compared to common benchmarks, the portfolio is heavily weighted towards equities, which may not suit all cautious investors. Consider adjusting the equity allocation to include more fixed income or cash for enhanced stability.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 12.93% and a maximum drawdown of -12.05%. This indicates strong growth potential with manageable risk. Compared to benchmarks, this performance is commendable, especially given its cautious classification. However, past performance does not guarantee future results. To mitigate potential risks, consider periodic rebalancing to maintain desired risk levels and ensure alignment with long-term goals.

Projection Info

The portfolio's forward projection, based on Monte Carlo simulations, suggests a promising range of outcomes. With a median expected return of 566.3% and all simulations yielding positive returns, the outlook is optimistic. Monte Carlo simulations use historical data to predict potential future outcomes, though they cannot account for unforeseen market events. Regularly reviewing projections can help adjust strategies as needed to stay aligned with goals.

Asset classes Info

  • Stocks
    80%
  • Other
    20%

The portfolio is predominantly allocated to stocks (approximately 80%), with a significant portion in gold (20%). This allocation supports growth while providing a hedge against inflation and market downturns. Compared to typical cautious portfolios, which often include more bonds, this one is more equity-heavy. Consider diversifying further by incorporating fixed income assets to balance risk and enhance income stability.

Sectors Info

  • Technology
    22%
  • Financials
    12%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Industrials
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is fairly balanced, with a notable emphasis on technology (21.59%) and financial services (12.37%). This composition aligns well with global benchmarks, suggesting a diversified approach. However, tech-heavy portfolios can be volatile during interest rate changes. Monitoring sector trends and adjusting allocations can help manage sector-specific risks and capitalize on emerging opportunities.

Regions Info

  • North America
    61%
  • Europe Developed
    12%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America (61.3%), with limited exposure to emerging markets. This concentration may limit diversification benefits and expose the portfolio to regional economic fluctuations. To enhance geographic diversification, consider increasing exposure to underrepresented regions, such as emerging markets, which may offer growth potential and risk mitigation.

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 could be optimized for a better risk-return ratio using the Efficient Frontier, which suggests an expected return of 14.25% at the same risk level. This optimization focuses on reallocating existing assets to achieve the best possible returns for the given risk. Consider exploring optimization strategies to enhance portfolio efficiency while staying aligned with investment goals and risk tolerance.

Ongoing product costs Info

  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Weighted costs total (per year) 0.16%

The portfolio's costs are low, with a Total Expense Ratio (TER) of 0.16% for the iShares Core MSCI World UCITS ETF. This cost efficiency supports better long-term performance by minimizing fees that can erode returns. Maintaining low costs is beneficial and aligns with best practices. Regularly reviewing and optimizing costs can further enhance returns.

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