High Growth Potential with Moderate Diversification and High Risk in Tech-Heavy Portfolio

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 suits a growth-oriented investor with a high risk tolerance, seeking substantial capital appreciation over the long term. Such an investor is comfortable with market volatility and potential drawdowns, understanding that significant returns often come with increased risk. The focus on technology and U.S. markets aligns with those looking for dynamic growth opportunities. A long investment horizon is ideal, allowing time to weather market fluctuations and capitalize on potential gains.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    40.00%
  • iShares U.S. Technology ETF
    IYW - US4642877215
    25.00%
  • VanEck Semiconductor ETF
    SMH - US92189F6768
    10.00%
  • Tesla Inc
    TSLA - US88160R1014
    10.00%
  • Vanguard International High Dividend Yield Index Fund ETF Shares
    VYMI - US9219467944
    10.00%
  • iShares Bitcoin Trust
    IBIT
    5.00%

The portfolio consists of a mix of ETFs and a common stock, emphasizing technology and growth. With 40% in the Vanguard S&P 500 ETF and 25% in the iShares U.S. Technology ETF, there's a clear focus on tech-driven growth. Tesla Inc. and the VanEck Semiconductor ETF further amplify this tech inclination. A small allocation to the iShares Bitcoin Trust adds a touch of alternative investment. The Vanguard International High Dividend Yield ETF offers some diversification with international exposure. This composition suggests a growth-oriented strategy, seeking high returns but accepting higher volatility.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth Info

Historically, this portfolio has performed exceptionally well, boasting a CAGR of 37.16%. This indicates strong growth potential, driven primarily by its tech-heavy allocation. However, the max drawdown of -13.4% suggests vulnerability during market downturns. The fact that 90% of returns are made up by just 11 days highlights the portfolio's reliance on high-impact days, often seen in tech-heavy investments. While past performance is not indicative of future results, this suggests a high-risk, high-reward scenario, suitable for those comfortable with volatility in pursuit of growth.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Using a Monte Carlo simulation, which models potential future portfolio performance through numerous random scenarios, the portfolio shows promising future growth. With a hypothetical initial investment, the median projection indicates a 34,915.72% return, while the 5th and 67th percentiles show a vast range of possible outcomes. This highlights the portfolio's potential for substantial growth, albeit with significant risk. The annualized return from simulations stands at 62.64%, suggesting strong future performance, but investors should be prepared for volatility and varying outcomes.

Asset classes Info

  • Stocks
    95%
  • Other
    5%
  • Cash
    0%

The portfolio primarily consists of stocks, making up 94.88% of its allocation, with a small 5.03% in other assets, including the Bitcoin ETF. This heavy stock allocation aligns with a growth-oriented strategy, aiming for capital appreciation. The minor cash position indicates minimal liquidity for immediate needs. Such a concentration in stocks suggests a willingness to accept higher risk for potentially higher returns. For those seeking more stability, diversifying into bonds or other asset classes could help balance risk and reward.

Sectors Info

  • Technology
    46%
  • Consumer Discretionary
    15%
  • Financials
    9%
  • Telecommunications
    6%
  • Health Care
    5%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

Technology dominates the portfolio, accounting for 46.04% of the allocation. Other sectors like consumer cyclicals and financial services have smaller representations, with the remaining sectors each contributing less than 10%. This sector allocation indicates a strong belief in the tech sector's growth potential. However, it also increases vulnerability to sector-specific downturns. To mitigate this risk, consider diversifying into underrepresented sectors, which could provide stability and reduce dependency on tech performance.

Regions Info

  • North America
    84%
  • Europe Developed
    5%
  • Asia Developed
    2%
  • Japan
    1%
  • Asia Emerging
    1%
  • Australasia
    1%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily skewed towards North America, with 83.62% exposure. This reflects a strong focus on the U.S. market, which has been a significant driver of global growth. While this concentration can capitalize on U.S. economic strength, it also exposes the portfolio to regional risks. Diversifying into other regions, such as emerging markets or Europe, could enhance global exposure and reduce reliance on North America, potentially smoothing returns across various economic cycles.

Redundant positions Info

  • Vanguard S&P 500 ETF
    iShares U.S. Technology ETF
    VanEck Semiconductor ETF
    High correlation

The portfolio exhibits high correlation among its tech-focused assets, notably the Vanguard S&P 500 ETF, iShares U.S. Technology ETF, and VanEck Semiconductor ETF. This correlation means these assets tend to move in the same direction, amplifying both gains and losses. While this can boost returns during tech sector rallies, it also heightens risk during downturns. Reducing correlation by including assets from different sectors or asset classes could enhance diversification and provide a more balanced risk-return profile.

Dividends Info

  • iShares U.S. Technology ETF 0.30%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 4.50%
  • Weighted yield (per year) 1.04%

The portfolio's overall dividend yield is 1.04%, with the Vanguard International High Dividend Yield ETF contributing the most at 4.5%. This suggests a primary focus on capital growth rather than income generation. While dividends can provide a steady income stream, the low yield aligns with the growth-oriented strategy of the portfolio. Investors seeking higher income might consider increasing exposure to dividend-focused assets, which could provide more consistent cash flow alongside capital appreciation.

Ongoing product costs Info

  • iShares Bitcoin Trust 0.12%
  • iShares U.S. Technology ETF 0.40%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
  • Weighted costs total (per year) 0.18%

The total expense ratio of 0.18% reflects a relatively low-cost structure, a positive aspect for long-term growth. The Vanguard S&P 500 ETF, with a 0.03% cost, is particularly cost-effective. However, the iShares U.S. Technology ETF and VanEck Semiconductor ETF have higher costs, at 0.4% and 0.35% respectively. Keeping costs low is crucial as they can erode returns over time. Investors should continue to monitor expense ratios and consider lower-cost alternatives if they align with their investment strategy.

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.

The current portfolio is not on the efficient frontier due to its high concentration in correlated tech assets. The efficient frontier represents the optimal risk-return balance, and this portfolio's overlap in tech may not fully capitalize on diversification benefits. While optimizing for diversification could reduce risk, the strong growth focus aligns with the investor's high-risk appetite. Balancing tech with uncorrelated assets could improve the risk-return profile, but this may not be necessary if the investor is comfortable with the current risk level.

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