Moderately Diversified Growth Portfolio with High Technology Exposure and Significant Risk

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 a growth-oriented investor who is comfortable with higher levels of risk and volatility. Such an investor typically has a long investment horizon, aiming for substantial capital appreciation over time. They are likely to prioritize high-growth sectors like technology and are less concerned with short-term market fluctuations. This investor should be prepared for potential significant drawdowns and have the financial stability to withstand periods of market turbulence.

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 - None
    5.00%

The portfolio consists of six positions, heavily weighted towards ETFs. Vanguard S&P 500 ETF makes up 40%, iShares U.S. Technology ETF 25%, VanEck Semiconductor ETF 10%, Tesla Inc 10%, Vanguard International High Dividend Yield Index Fund ETF Shares 10%, and iShares Bitcoin Trust 5%. This composition shows a clear preference for growth-oriented assets, with a notable tilt towards the technology sector. To enhance diversification, consider adding more asset classes like bonds or other defensive stocks to balance the high-risk elements.

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

Growth

Historically, the portfolio has shown impressive performance with a CAGR of 21.01%. However, it experienced a maximum drawdown of -13.4%, indicating significant volatility. This high growth rate is attractive but comes with risks, especially during market downturns. For long-term stability, it might be wise to incorporate more stable assets. This can help reduce the impact of market fluctuations and provide a more consistent performance.

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

Projection

Using a Monte Carlo simulation with 1,000 scenarios, the portfolio's future performance was projected. The 5th percentile end value is 24.61%, while the median (50th percentile) is 1,390.54%, and the 67th percentile is 2,806.11%. The annualized return across all simulations is 30.26%, showing a high potential for growth. However, the wide range of outcomes emphasizes the portfolio's volatility. Diversifying into lower-risk assets can help narrow this range and provide more predictable returns.

Asset classes

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

The portfolio is predominantly composed of stocks, making up 94.71% of the total assets. This high concentration in equities suggests a high-risk, high-reward strategy. While this can lead to significant gains, it also exposes the portfolio to market volatility. To mitigate this risk, consider allocating a portion of the portfolio to bonds or other fixed-income securities. This can provide a buffer during market downturns and reduce overall portfolio risk.

Sectors

  • Technology
    45%
  • Consumer Discretionary
    15%
  • Financials
    9%
  • Telecommunications
    7%
  • Health Care
    6%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation is heavily skewed towards technology, which comprises 45.02% of the portfolio. Other significant sectors include Consumer Cyclicals (15.05%) and Financial Services (8.65%). This concentration in tech can drive high returns but also increases vulnerability to sector-specific downturns. To achieve a more balanced sector allocation, consider investing in sectors like healthcare, utilities, or consumer defensive. This can provide stability and reduce the impact of sector-specific risks.

Regions

  • North America
    83%
  • 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 concentrated in North America, which accounts for 83.45% of the assets. Other regions like Europe Developed (5.40%) and Asia Developed (2.18%) have minimal representation. This geographic concentration increases exposure to regional risks. To achieve better geographic diversification, consider increasing allocations to emerging markets and other international regions. This can help mitigate regional risks and provide exposure to diverse economic growth opportunities.

Dividends

  • iShares U.S. Technology ETF 0.30%
  • VanEck Semiconductor ETF 0.50%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 4.70%
  • Weighted yield (per year) 1.16%

The portfolio includes the Vanguard International High Dividend Yield Index Fund ETF Shares, which provides some dividend income. However, the overall dividend yield is not specified, suggesting that the portfolio is more focused on growth than income. If generating regular income is a goal, consider incorporating more high-dividend-paying stocks or dividend-focused ETFs. This can provide a steady income stream and add a layer of stability to the portfolio.

Ongoing product costs

  • 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 (TER) of the portfolio is 0.18%, which is relatively low. The highest expense ratio comes from the iShares U.S. Technology ETF at 0.4%, while the lowest is the Vanguard S&P 500 ETF at 0.03%. Keeping investment costs low is crucial for maximizing net returns over time. To further reduce costs, consider reviewing and possibly replacing higher-cost ETFs with lower-cost alternatives. This can help improve overall portfolio efficiency.

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