A balanced global portfolio with a strategic mix of stocks and bonds for long-term growth

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor seeking balanced growth with moderate risk tolerance and a long-term horizon. It prioritizes steady returns while maintaining exposure to global equities, making it ideal for individuals looking to build wealth over time. The investor likely values a mix of income and capital appreciation, with a keen interest in leveraging global market dynamics to mitigate risk and capture growth across different sectors and regions.

Positions

  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    VWCE - IE00BK5BQT80
    50.00%
  • iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc)
    EUNA - IE00BDBRDM35
    20.00%
  • Vanguard FTSE Emerging Markets UCITS ETF USD Accumulation
    VFEA - IE00BK5BR733
    15.00%
  • Vanguard S&P 500 UCITS Acc
    VUAA - IE00BFMXXD54
    15.00%

Your portfolio is a well-structured blend of 80% stocks and 20% bonds, indicating a balanced approach towards growth with a cushion against market volatility. The stock portion is diversified across major global markets, including emerging markets, with a significant allocation in the Vanguard FTSE All-World UCITS ETF. The bond allocation, primarily through the iShares Core Global Aggregate Bond UCITS ETF, provides stability and income, hedging against the stock market's ups and downs. This composition aligns well with a balanced risk profile, seeking growth while managing risk through global diversification.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 8.30% and a maximum drawdown of -26.94%, your portfolio has demonstrated resilience and growth over time. The days contributing most to returns highlight the importance of staying invested, as significant gains often come from a handful of days. Comparing this performance to benchmarks, it's apparent that your portfolio's mix of asset classes and geographic diversification has contributed positively to its overall resilience and growth potential.

Projection Info

Monte Carlo simulations suggest a wide range of potential outcomes, with a median increase of 147.8% in portfolio value. It's important to understand that these projections, while useful for planning, are based on historical data and cannot predict future market conditions. The high percentage of simulations resulting in positive returns underscores the portfolio's solid foundation but also highlights the inherent uncertainties in investing.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

Your allocation across asset classes, with a predominant focus on stocks, is geared towards growth while the bond allocation provides a buffer against market downturns. This balance is crucial for a balanced investor, particularly in volatile markets. The absence of alternative investments like real estate or commodities might be a missed opportunity for further diversification and potential returns, depending on your risk tolerance and investment horizon.

Sectors Info

  • Technology
    21%
  • Financials
    15%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Telecommunications
    7%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral distribution within your portfolio, with a strong emphasis on technology and financial services, positions you well to benefit from growth in these dynamic sectors. However, this concentration also exposes you to sector-specific risks. Diversifying across more sectors, or adjusting allocations to reduce concentration in any one sector, could mitigate this risk while still capturing growth opportunities across the broader economy.

Regions Info

  • North America
    47%
  • Asia Emerging
    12%
  • Europe Developed
    8%
  • Asia Developed
    5%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    1%
  • Europe Emerging
    0%

Your portfolio's geographic distribution, with nearly half allocated to North America and significant exposure to emerging Asian markets, reflects a strategic approach to global diversification. This geographic spread can help mitigate regional risks and capitalize on growth opportunities worldwide. However, the relatively low exposure to developed European markets and other regions suggests potential areas for further diversification.

Market capitalization Info

  • Mega-cap
    39%
  • Large-cap
    27%
  • Mid-cap
    13%
  • Small-cap
    1%
  • Micro-cap
    0%

The market capitalization breakdown, with a strong lean towards mega and big-cap stocks, suggests stability and lower volatility but may limit potential high-growth opportunities found in smaller-cap stocks. Considering a modest increase in medium to small-cap exposure could enhance growth prospects, especially in rapidly growing sectors or regions, while still aligning with your balanced risk profile.

Redundant positions Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    Vanguard S&P 500 UCITS Acc
    High correlation

The high correlation observed between the Vanguard FTSE All-World UCITS ETF and the Vanguard S&P 500 UCITS ETF indicates overlapping exposures, which may reduce the effectiveness of your diversification strategy. Identifying and reducing such overlaps can enhance your portfolio's diversification benefits, potentially improving risk-adjusted returns by ensuring that each asset contributes uniquely to your portfolio's performance.

Ongoing product costs Info

  • iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) 0.10%
  • Vanguard FTSE Emerging Markets UCITS ETF USD Accumulation 0.22%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.17%

With a total expense ratio (TER) of 0.17%, your portfolio benefits from relatively low costs, which is commendable. Lower costs translate directly into higher net returns over time. Continuously monitoring and minimizing investment costs without compromising on quality or diversification is key to maximizing long-term growth.

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.

Considering the Efficient Frontier, your portfolio shows room for optimization by addressing the redundancy among highly correlated assets. By reallocating or diversifying away from overlapping investments, you could potentially achieve a more efficient risk-return profile. This process involves evaluating each asset's contribution to portfolio risk and return, aiming for an optimal mix that aligns with your investment goals and risk tolerance.

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