Broadly Diversified Growth Portfolio with High North American Exposure and Moderate Costs

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 growth-oriented investors with a moderate to high-risk tolerance. Such investors typically have a long-term investment horizon and seek capital appreciation rather than immediate income. They are comfortable with market volatility and are willing to endure short-term losses for the potential of higher long-term gains. This type of investor values diversification across sectors and geographies but remains heavily focused on equities to maximize growth opportunities. Their investment goals often include wealth accumulation and achieving financial independence.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    30.00%
  • Vanguard Growth Index Fund ETF Shares
    VUG - US9229087369
    14.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    10.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    10.00%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares
    VEA - US9219438580
    10.00%
  • JPMorgan U.S. Quality Factor ETF
    JQUA - US46641Q7613
    5.00%
  • iShares Semiconductor ETF
    SOXX - US4642875235
    5.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    5.00%
  • Industrial Select Sector SPDR® Fund
    XLI - US81369Y7040
    5.00%
  • Franklin FTSE Latin America ETF
    FLLA - US35473P5614
    3.00%
  • Global X Uranium ETF
    URA - US37954Y8710
    3.00%

The portfolio is composed of 11 different ETFs, with a significant emphasis on U.S.-based funds. The largest allocation is to the Vanguard S&P 500 ETF at 30%, followed by the Vanguard Growth Index Fund ETF Shares at 14%. This suggests a strong preference for large-cap U.S. equities. The portfolio also includes small-cap and sector-specific ETFs, providing a broad diversification across different market segments. This mix of ETFs indicates a balanced approach to growth investing, aiming to capture gains from various market sectors and capitalizations.

Growth

Historically, the portfolio has shown a strong performance with a Compound Annual Growth Rate (CAGR) of 14.45%. However, it also experienced a significant maximum drawdown of -35.38%, indicating vulnerability during market downturns. The fact that 90% of returns came from just 14 days highlights the importance of staying invested to capture these critical gains. This performance suggests that while the portfolio has potential for high returns, it also carries a considerable level of risk, particularly in volatile market conditions.

Projection

Using a Monte Carlo simulation with 1,000 iterations, the portfolio projects a wide range of potential outcomes. The median (50th percentile) end portfolio value is 536.26%, with a 67th percentile value of 837.98%. The 5th percentile, representing a more conservative estimate, is 19.85%. These simulations assume a hypothetical initial investment and offer a probabilistic view of future performance. The high number of simulations with positive returns (965 out of 1,000) suggests a favorable outlook, but the wide range in outcomes underscores the inherent uncertainty.

Asset classes

  • Stocks
    99%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is heavily weighted towards equities, with 99.48% in stocks and minimal allocations in cash and other asset classes. This high equity exposure aligns with the growth objective but also increases vulnerability to market volatility. Diversification across asset classes could potentially reduce risk. However, given the current composition, the portfolio is positioned to benefit from equity market upswings. Investors may want to consider adding bonds or other fixed-income assets to balance the risk-reward profile.

Sectors

  • Technology
    26%
  • Industrials
    15%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Energy
    8%
  • Telecommunications
    6%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Real Estate
    2%
  • Utilities
    1%

Sector allocation shows a significant concentration in Technology (25.89%), followed by Industrials (14.75%) and Financial Services (13.36%). This indicates a strong tilt towards sectors that are typically more volatile but also offer higher growth potential. The portfolio is well-diversified across various sectors, which can help mitigate sector-specific risks. However, the heavy reliance on technology could lead to higher volatility. Adjusting sector weights to achieve a more balanced exposure could enhance stability without sacrificing growth potential.

Regions

  • North America
    81%
  • Europe Developed
    8%
  • Latin America
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Asia Emerging
    1%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly focused on North America, with 80.96% of assets allocated there. Europe Developed and Latin America follow with 8.08% and 3.24%, respectively. This heavy North American focus aligns with the preference for U.S. equities but limits exposure to international markets. Diversifying geographically could reduce region-specific risks and provide opportunities in emerging and developed markets outside North America. Investors might consider increasing allocations to other regions to achieve a more globally balanced portfolio.

Dividends

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Franklin FTSE Latin America ETF 6.70%
  • JPMorgan U.S. Quality Factor ETF 1.20%
  • Schwab U.S. Dividend Equity ETF 3.50%
  • iShares Semiconductor ETF 0.70%
  • Global X Uranium ETF 6.90%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 3.40%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Industrial Select Sector SPDR® Fund 1.50%
  • Weighted yield (per year) 2.08%

Dividend yield data is not provided, but the inclusion of the Schwab U.S. Dividend Equity ETF suggests an intent to capture dividend income. Dividends can provide a steady income stream and add to total returns, especially in volatile markets. Investors should monitor dividend yields and consider the impact of dividend reinvestment on long-term growth. Balancing growth with income-generating assets can enhance the portfolio's overall performance and provide a buffer during market downturns.

Ongoing product costs

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Franklin FTSE Latin America ETF 0.19%
  • JPMorgan U.S. Quality Factor ETF 0.12%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • iShares Semiconductor ETF 0.35%
  • Global X Uranium ETF 0.69%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Industrial Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.11%

The total expense ratio (TER) for the portfolio is 0.11%, which is relatively low and indicative of cost-effective fund choices. The lowest cost is associated with the Vanguard S&P 500 ETF at 0.03%, while the highest is the Global X Uranium ETF at 0.69%. Keeping investment costs low is crucial for maximizing net returns. Investors should continue to monitor the expense ratios and consider lower-cost alternatives if available. Maintaining a low-cost structure will help in achieving better net returns over the long term.

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