High-Risk Growth Portfolio with Broad Diversification and Concerning Projections

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 high-risk, growth-oriented investor who seeks significant capital appreciation and is comfortable with substantial volatility. Such an investor typically has a long investment horizon, allowing time to recover from potential market downturns. They are willing to accept the possibility of significant losses in pursuit of higher returns and are not reliant on their investments for immediate income.

Positions

  • Amundi Index Solutions - Amundi Prime Global UCITS ETF DR GBP
    PRIW - LU1931974692
    50.00%
  • JPM Global Equity Multi-Factor UCITS ETF USD Acc GBP
    JPLG - IE00BJRCLL96
    30.00%
  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income
    VAGP - IE00BG47KG48
    13.00%
  • Amundi Index Solutions - Amundi Index FTSE EPRA NAREIT Global UCITS ETF DR
    EPRA - LU1437018838
    7.00%

The portfolio is composed of 50% Amundi Index Solutions - Amundi Prime Global UCITS ETF DR GBP, 30% JPM Global Equity Multi-Factor UCITS ETF USD Acc GBP, 13% Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income, and 7% Amundi Index Solutions - Amundi Index FTSE EPRA NAREIT Global UCITS ETF DR. This mix shows a strong lean towards equities, with a minor allocation to bonds and real estate. A high equity allocation typically indicates a preference for growth, but it also introduces higher volatility and risk.

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

Growth

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 60.1%, which is exceptionally high. However, it has also experienced a significant maximum drawdown of -20.08%. This indicates that while the portfolio has had periods of impressive returns, it has also faced substantial losses. High volatility can be concerning for investors who are not comfortable with significant fluctuations in their portfolio value.

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

Projection

Using a Monte Carlo simulation with 1,000 iterations, the projections for the portfolio are alarming. The simulation assumes a hypothetical initial investment and shows a 5th, 50th, and 67th percentile end value of -100.0%, with no simulations yielding positive returns. This suggests a very high risk of significant losses in the future. Monte Carlo simulations provide a range of possible outcomes based on historical data and help in understanding the potential risks and rewards of an investment strategy.

Asset classes

  • Stocks
    80%
  • Bonds
    13%
  • Unknown
    7%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is diversified across three main asset classes: 79.9% stocks, 13% bonds, and 7% classified as unknown. This heavy weighting towards stocks is typical for a growth-oriented portfolio, aiming for higher returns at the expense of increased risk. A small allocation to bonds helps to somewhat mitigate risk, but the overall risk remains high due to the dominant equity exposure.

Sectors

  • Technology
    16%
  • Financials
    10%
  • Health Care
    10%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Unknown
    7%
  • Consumer Staples
    6%
  • Telecommunications
    6%
  • Energy
    4%
  • Utilities
    4%
  • Basic Materials
    4%
  • Real Estate
    3%

The portfolio is spread across various sectors, with the largest allocations in Technology (16.1%), Financial Services (10.3%), and Healthcare (9.5%). This sector diversification can help reduce risk by spreading investments across different parts of the economy. However, a high concentration in volatile sectors like Technology can increase the overall risk. Balancing sector allocations could provide more stability.

Regions

  • North America
    58%
  • Europe Developed
    14%
  • Unknown
    7%
  • Japan
    5%
  • Australasia
    2%
  • Asia Developed
    1%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America (57.9%), followed by Europe Developed (13.7%), and Japan (5.3%). This geographic diversification can help mitigate region-specific risks but also means the portfolio is significantly influenced by the performance of the North American market. Considering a more balanced geographic allocation might reduce potential volatility.

Dividends

  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income 144.50%
  • Weighted yield (per year) 18.78%

Dividend yield data is not provided for this portfolio. Dividends can be an essential component of total returns, especially for those seeking income. If dividends are a priority, it might be beneficial to include ETFs or funds that focus on dividend-paying stocks to provide a more stable income stream alongside potential capital appreciation.

Ongoing product costs

  • Amundi Index Solutions - Amundi Prime Global UCITS ETF DR GBP 0.05%
  • Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income 0.10%
  • Weighted costs total (per year) 0.04%

The portfolio costs are relatively low, with the Amundi Index Solutions ETF at 0.05% and the Vanguard Global Aggregate Bond ETF at 0.1%. The total TER is 0.04%, which is very cost-effective. Low costs are advantageous as they help to maximize net returns over time. Keeping investment costs low should continue to be a priority to enhance overall portfolio performance.

What next?

Talk to a financial advisor!

Refine your strategy with expert guidance.

Schedule a free call

Create your report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial advice. The content presented is general and educational in nature and provides insights and ideas onvarious financial topics.

Insightfolio assumes no liability for the accuracy, completeness or reliability of the information presented. Users are responsible for verifying the information and making independent decisions based on their own research and careful consideration.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. It is important to carefully consider your own risk tolerance and financial goals before making investment decisions.

By accessing the services, information or content offered by Insightfolio, users agree to the terms of this disclaimer. If you do not agree to these terms and conditions, please do not use our platform.

Was that report valuable for you?

We'd love to get your honest opinion! Give us your Feedback