A cautiously constructed portfolio with a strong focus on global equities and moderate diversification

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

Cautious Investors

This portfolio is well-suited for investors seeking balanced growth with a moderate risk tolerance and a long-term investment horizon. It prioritizes steady returns through a significant allocation to global equities, tempered by conservative investments in bonds and commodities, making it ideal for individuals aiming to build wealth while managing volatility.

Positions

  • Vanguard S&P 500 UCITS Acc
    VUAG - IE00BFMXXD54
    60.00%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation
    VWRP - IE00BK5BQT80
    30.00%
  • iShares € High Yield Corp Bond ESG UCITS ETF GBP Hedged (Acc)
    EHYG - IE000YZVB4R7
    5.00%
  • iShares Physical Gold ETC
    SGLN - IE00B4ND3602
    5.00%

This portfolio predominantly invests in global equities through two major ETFs, allocating 90% to stocks across the Vanguard S&P 500 and Vanguard FTSE All-World, with a minor allocation to bonds and commodities for risk mitigation. The heavy reliance on equity ETFs, particularly with 60% in an S&P 500 tracker, suggests a significant tilt towards US markets. The inclusion of a high-yield corporate bond ETF and physical gold provides a conservative balance, aiming to reduce volatility and protect against inflation.

Growth Info

Historically, the portfolio has demonstrated robust growth with a Compound Annual Growth Rate (CAGR) of 16.76%, outperforming many conservative benchmarks. The maximum drawdown of -17.82% indicates resilience during market downturns, partly due to its diversified yet equity-focused approach. However, it's crucial to remember that past performance is not indicative of future results, especially in a portfolio with a high concentration in equities.

Projection Info

Monte Carlo simulations, which use historical data to forecast potential outcomes, suggest a wide range of future portfolio values, emphasizing the uncertainty inherent in investing. With all simulations showing positive returns, the median outcome significantly exceeds the initial investment, but investors should remain cautious, as these projections cannot guarantee future performance.

Asset classes Info

  • Stocks
    90%
  • Other
    5%
  • Bonds
    5%
  • No data
    0%
  • Cash
    0%

The asset allocation, with 90% in stocks and the remainder in bonds and commodities, aligns with a growth-oriented strategy while incorporating elements of risk management. This balance supports the portfolio's moderate risk score but may need adjustment to align more closely with the investor's risk tolerance and time horizon.

Sectors Info

  • Technology
    28%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Telecommunications
    8%
  • Health Care
    8%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The sectoral allocation reveals a heavy emphasis on technology, financial services, and consumer cyclicals, mirroring the broader market trends but also exposing the portfolio to sector-specific risks. Diversifying into underrepresented sectors or reducing the tech-heavy focus could mitigate potential volatility.

Regions Info

  • North America
    79%
  • Europe Developed
    5%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    1%
  • Australasia
    1%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

The geographic distribution is heavily skewed towards North America, primarily the US, reflecting the S&P 500's composition. While this has historically been a source of strength, the underrepresentation of emerging markets and other developed regions might limit exposure to global growth opportunities, suggesting a potential area for diversification.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    16%
  • Unknown
    5%
  • Small-cap
    1%
  • Micro-cap
    0%

The concentration in mega and large-cap stocks underlines the portfolio's preference for established, less volatile companies. However, the minimal exposure to small and micro-caps means missing out on the higher growth potential these companies can offer, albeit with increased risk.

Redundant positions Info

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

The high correlation between the Vanguard S&P 500 and Vanguard FTSE All-World ETFs indicates overlapping holdings, which may reduce the effectiveness of diversification. Considering assets with lower correlation could enhance portfolio resilience against market fluctuations.

Ongoing product costs Info

  • iShares Physical Gold ETC 0.25%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.12%

With a total expense ratio (TER) of 0.12%, the portfolio benefits from low costs, enhancing long-term returns. The emphasis on cost-efficient ETFs is a prudent strategy, especially for a portfolio designed with a cautious risk profile in mind.

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.

Optimizing the portfolio to reduce overlap and improve diversification could potentially increase the expected return to 11.51% without significantly altering its risk profile. This suggests that there's room for improvement in asset allocation to achieve a more efficient risk-return balance.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.