Balanced global investment portfolio with a strong emphasis on developed markets

Report created on Jul 21, 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 predominantly consists of global equities, with a significant allocation to developed markets through the iShares Core MSCI World UCITS ETF USD (Acc) at 76%, complemented by exposure to emerging markets via two ETFs totaling 24%. The asset allocation is entirely in stocks, indicating a growth-oriented strategy but with a balanced risk profile, given the diversification across both developed and emerging markets. The absence of fixed income or alternative investments suggests a preference for equity returns over income generation or volatility dampening.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 10.94%, with a maximum drawdown of -32.19%. These figures highlight the portfolio's ability to generate substantial returns, albeit with significant volatility. The concentration in equities, particularly in developed markets, has likely contributed to these robust growth figures. However, the max drawdown underscores the risk associated with a 100% equity allocation, particularly during market downturns.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, indicate a wide range of potential future returns for this portfolio. The 50th percentile outcome suggests a potential 223.5% increase, with a 10.28% annualized return across all simulations. While these projections are optimistic, it's crucial to remember that such simulations are based on past performance, which is not a reliable indicator of future results. Diversification and risk management remain key to navigating uncertainties.

Asset classes Info

  • Stocks
    100%

The portfolio's asset class allocation is singularly focused on stocks, providing a clear growth trajectory but also exposing investors to market volatility. While this aligns with a balanced risk profile seeking capital appreciation, the absence of bonds or alternative assets omits potential buffers against equity market downturns. For a truly balanced approach, incorporating fixed income or other asset classes could offer risk mitigation and income generation, enhancing long-term stability.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation is heavily weighted towards technology and financial services, which constitute 43% of the portfolio. This concentration in high-growth sectors has likely fueled the portfolio's strong historical performance but also increases susceptibility to sector-specific downturns. Diversifying across additional sectors could reduce volatility without significantly compromising growth potential, especially considering the cyclical nature of sectors like industrials and consumer cyclicals.

Regions Info

  • North America
    57%
  • Europe Developed
    13%
  • Asia Emerging
    12%
  • Asia Developed
    8%
  • Japan
    4%
  • Africa/Middle East
    3%
  • Latin America
    2%
  • Australasia
    1%
  • Europe Emerging
    1%

Geographic allocation heavily favors North America (57%), with meaningful exposure to Europe and emerging markets in Asia. This distribution supports diversification and access to global growth opportunities but may reflect an underweight position in fast-growing regions like Asia Emerging and Latin America. Expanding exposure to underrepresented regions could capture growth in dynamic economies and further diversify geopolitical risks.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    19%
  • Small-cap
    2%

The portfolio's market capitalization exposure is balanced, with a tilt towards mega and big-cap stocks, which comprise 78% of the allocation. This preference for larger companies likely contributes to the portfolio's resilience and growth, as these entities tend to be more stable and have more resources to navigate economic cycles. However, the limited exposure to small and micro-cap stocks may mean missing out on higher growth potential in these segments.

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.

Considering the Efficient Frontier, this portfolio could potentially be optimized for a better risk-return ratio by diversifying across more asset classes and reducing sector concentration. While the current allocation has performed well historically, a more diversified approach could provide similar returns with lower volatility, aligning more closely with the principles of the Efficient Frontier. This would involve broadening the asset base beyond equities and adjusting sector weights.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • SPDR MSCI Emerging Markets Small Cap UCITS ETF 0.55%
  • iShares Core MSCI World UCITS ETF USD (Acc) 0.20%
  • Weighted costs total (per year) 0.21%

The portfolio benefits from relatively low costs, with a Total Expense Ratio (TER) of 0.21%, which is impressive for a diversified global equity strategy. Keeping costs low is crucial for enhancing long-term returns, as fees can compound and significantly erode wealth over time. The choice of low-cost ETFs is commendable and should continue to be a priority in future investment decisions.

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