Your portfolio will be constructed in different ways depending if you choose an individual tailored portfolio or a starter portfolio:
When creating your individual Starter portfolio we use the combination of equities and bonds you selected in order to then build your chosen asset allocation with our preferred list of ETFs. Our 21 static portfolios are divided into three broad risk categories: Conservative, Balanced and Aggressive.
- The defensive portfolio focus is on minimal risk to the principal amount while still generating an income stream. Only modest long-term growth can be expected, and the time horizon of the investment is short- to mid-range. The target allocation for the defensive portfolio is 80% bonds and 20% equity.
- The balanced portfolio seeks to reduce the potential volatility by including income generating investments such as bonds, accepting that the overall portfolio will be likely to deliver moderate growth of the principal amount, and will exhibit short-term price fluctuations. The time horizon for a balanced investment is mid to long-range and has a target allocation of 50% equity and 50% bonds.
- The aggressive portfolio seeks to maximize the long-term potential for growth of principal. In return the investor is willing to tolerate the risk of large short-term price fluctuations, and that the portfolio is unlikely to generate income in the form of dividends. The time horizon for an aggressive investment is long term and the portfolio has a target allocation of 80% equity and 20% bonds.
- For all target allocations, within the equity component the indices are weighted by market capitalisation, and within the bond component the weightings are 80% on government debt in the local currency, and 20% on international bonds. All targets have been rounded to full percentages.
| Defensive | Balanced | Aggressive | |
| Equity | 20.00% | 50.00% | 80.00% |
| North America | 11.10% | 27.60% | 44.30% |
| Europe ex-UK | 3.30% | 8.30% | 13.20% |
| APAC Ex-JPN | 0.90% | 2.30% | 3.70% |
| Japan | 1.50% | 3.80% | 6.00% |
| UK | 1.10% | 2.80% | 4.50% |
| Emerging Markets | 2.10% | 5.20% | 8.30% |
| Bonds | 80.00% | 50.00% | 20.00% |
| Home Bonds | 64.00% | 40.00% | 16.00% |
| Int'l Bonds | 16.00% | 10.00% | 4.00% |
For our Custom portfolios, we allow you to build your own asset allocation with the asset classes we use as building blocks in our portfolios. These consist of Conventional and Index-Linked Government bonds, and equities broken down by the geographical regions of the world stock markets (MSCI All Countries World Index). We then select the best ETFs to implement your chosen asset allocation and manage the portfolio for you.
Read our to find out more: etfmatic.com/whitepaper
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