What should I trim to lower risk?
A question about what could be done next. The answer describes what is there and what would change; what to do about it is a decision only the person holding the portfolio can make.
Worked through on a sample portfolio. The figures below are that portfolio’s, not yours.
I can’t give recommendations or tell you to buy, sell or trim holdings. I can explain which parts of your portfolio are contributing most to risk so you can decide.
Here are the top contributors to portfolio volatility (annualised), sorted by contribution:
| Asset | Weight (%) | Volatility p.a. (%) | Volatility contribution (%) |
|---|---|---|---|
| Apple Inc. | 18,41% | 22,99 | 20,90 |
| Microsoft Corp. | 11,62% | 30,50 | 15,98 |
| Deutsche Lufthansa AG | 8,41% | 30,67 | 14,48 |
| iShares Core MSCI World UCITS ETF | 16,55% | 9,00 | 10,69 |
| Bitcoin | 5,11% | 35,92 | 10,40 |
| Ethereum | 3,50% | 52,30 | 10,24 |
| MasterCard Inc. | 10,66% | 16,80 | 5,40 |
| SPDR MSCI USA Small Cap Value Weighted UCITS ETF | 4,37% | 20,84 | 3,96 |
| Gold | 5,03% | 24,43 | 3,19 |
| Xtrackers MSCI USA UCITS ETF 1C | 6,38% | 9,78 | 2,48% |
| iShares Core MSCI EM IMI UCITS ETF USD (Acc) | 3,91% | 16,53 | 2,27 |
What this means (explanation only):
- Large weight plus high volatility causes the biggest contributions. Your largest single contributors are Apple Inc. and Microsoft Corp. by contribution percentage.
- Crypto positions (Bitcoin and Ethereum) have high volatility and together add ~+20,64% of volatility contribution.
- Some positions with moderate weight but high volatility (e.g. Deutsche Lufthansa AG) also move the needle.
If you want different views I can show the same table sorted by weight, by unrealized return, or present sector-level risk contributions next.
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See this for your own portfolio
The assistant answers the same question about your own holdings, with your figures and today’s prices. Import from your broker, or open the demo portfolio and ask it there.