Moderately Diversified Growth Portfolio with High Technology Exposure

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

Growth Investors

This portfolio is suitable for an investor with a high-risk tolerance who is seeking significant capital appreciation. Such an investor is likely focused on long-term growth, willing to accept substantial short-term volatility, and not reliant on regular income from their investments. The ideal investment horizon would be 10 years or more, allowing time to ride out market fluctuations.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    50.00%
  • Franklin FTSE India ETF
    FLIN - US35473P7693
    20.00%
  • iShares Expanded Tech Sector ETF
    IGM - US4642875490
    20.00%
  • Defiance Quantum
    QTUM - US26922A4206
    10.00%

The portfolio consists of four ETFs, with a significant allocation to the Vanguard S&P 500 ETF at 50%, followed by Franklin FTSE India ETF at 20%, iShares Expanded Tech Sector ETF at 20%, and Defiance Quantum ETF at 10%. This composition indicates a strong focus on equities, particularly in the technology sector, with a moderate level of diversification across different markets and sectors.

Growth

Historically, the portfolio has shown a robust performance with a Compound Annual Growth Rate (CAGR) of 15.5%. However, it has also experienced significant volatility, evidenced by a maximum drawdown of -34.05%. This suggests that while the portfolio has the potential for high returns, it also carries a substantial risk of losses during market downturns.

Projection

Using a Monte Carlo simulation with 1,000 runs, the portfolio's future performance was projected. The median (50th percentile) end portfolio value was 823.09%, with a 5th percentile value of 83.62% and a 67th percentile value of 1,259.23%. This simulation indicates a wide range of potential outcomes, reflecting the high-risk, high-reward nature of the portfolio.

Asset classes

  • Stocks
    100%
  • Cash
    0%

The portfolio is heavily weighted towards stocks, with 99.68% allocated to equities and a minimal 0.32% in cash. This high equity exposure aligns with the growth objective but also increases the portfolio's risk. Diversifying into other asset classes such as bonds or commodities could help mitigate this risk.

Sectors

  • Technology
    41%
  • Financials
    11%
  • Telecommunications
    10%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Health Care
    7%
  • Consumer Staples
    4%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation is dominated by technology at 40.94%, followed by financial services and communication services. This heavy concentration in technology can drive significant growth but also exposes the portfolio to sector-specific risks. A more balanced sector allocation could enhance stability and reduce volatility.

Regions

  • North America
    76%
  • Asia Emerging
    20%
  • Europe Developed
    2%
  • Japan
    1%
  • Asia Developed
    1%
  • Africa/Middle East
    0%

Geographically, the portfolio is predominantly invested in North America (75.65%), with notable exposure to emerging Asia (20.45%). This geographic concentration can lead to regional risk, and adding more investments from other regions could provide better geographic diversification and reduce potential regional downturn impacts.

Dividends

  • Franklin FTSE India ETF 1.50%
  • iShares Expanded Tech Sector ETF 0.30%
  • Defiance Quantum 0.90%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.10%

The portfolio's dividend yield data is not provided, but given the high allocation to growth-oriented ETFs, it is likely to have a lower dividend yield. This is typical for growth portfolios, which prioritize capital appreciation over income generation. Investors seeking regular income might need to adjust their strategy.

Ongoing product costs

  • Franklin FTSE India ETF 0.19%
  • iShares Expanded Tech Sector ETF 0.41%
  • Defiance Quantum 0.40%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.18%

The total expense ratio (TER) of the portfolio is 0.18%, which is relatively low. The Vanguard S&P 500 ETF has the lowest cost at 0.03%, while the iShares Expanded Tech Sector ETF and Defiance Quantum ETF are higher at 0.41% and 0.4%, respectively. Keeping costs low is beneficial for long-term returns, and this portfolio does well in that regard.

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