Growth-oriented portfolio with a strong tech focus and high North American 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 suits an investor with a high risk tolerance seeking aggressive growth through equities. With a focus on large-cap U.S. stocks, it's ideal for those with a long-term horizon aiming to capitalize on market upswings. The significant tech exposure suggests a belief in innovation-driven growth, making it suitable for those comfortable with potential volatility. Investors should be prepared for short-term fluctuations and have a strong conviction in the U.S. market's long-term prospects. Regular monitoring and adjustments are key to aligning with evolving financial goals.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    30.00%
  • Vanguard Growth Index Fund ETF Shares
    VUG - US9229087369
    20.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    15.00%
  • VanEck Semiconductor ETF
    SMH - US92189F6768
    15.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    10.00%
  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    10.00%

The portfolio is heavily weighted in ETFs, with the Vanguard S&P 500 ETF making up 30% and the Vanguard Growth Index Fund ETF Shares at 20%. This structure leans heavily towards large-cap U.S. equities, reflecting a growth-oriented strategy. Compared to a typical benchmark, this portfolio has a higher concentration in growth-focused ETFs, which can lead to higher returns but also increased volatility. It's important to ensure this aligns with your risk tolerance and long-term goals. Consider diversifying into other asset classes like bonds or international equities to reduce risk and enhance stability.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 13.63%, indicating robust performance over time. However, it also experienced a significant max drawdown of -30.81%, highlighting the potential volatility of a growth-focused strategy. Compared to benchmarks, this performance suggests a higher risk-reward profile. While past performance can guide expectations, it's crucial to remember that it doesn't guarantee future results. To manage risk, consider strategies like dollar-cost averaging or setting stop-loss orders to protect against significant downturns.

Projection Info

Monte Carlo simulations project potential outcomes by running numerous scenarios using historical data. For this portfolio, simulations show a median return of 394.8% with a 14.32% annualized return. This suggests a strong growth potential but also emphasizes the inherent uncertainty in future markets. Given that 970 out of 1,000 simulations resulted in positive returns, the outlook is optimistic. However, it's essential to remain cautious and regularly review your investment strategy to ensure it aligns with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is entirely composed of stocks, with no exposure to bonds, cash, or other asset classes. This allocation can lead to substantial growth during bullish markets but may also increase risk during downturns. Compared to a balanced benchmark, this lack of diversification may expose the portfolio to higher volatility. To mitigate risks, consider introducing other asset classes like bonds, which can provide stability and income during market fluctuations. This adjustment can enhance the portfolio's resilience and align it with a more diversified investment strategy.

Sectors Info

  • Technology
    46%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Financials
    9%
  • Health Care
    8%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is heavily concentrated in technology, comprising 46% of the allocation. This sector focus can drive significant growth, especially during tech booms, but may also lead to higher volatility during market corrections or interest rate hikes. Compared to a diversified benchmark, this concentration could increase risk exposure. To balance sector risk, consider reallocating some funds to underrepresented sectors like healthcare or consumer defensive, which can offer stability and diversification benefits, especially during economic downturns.

Regions Info

  • North America
    93%
  • Europe Developed
    3%
  • Asia Developed
    2%
  • Asia Emerging
    1%
  • Japan
    1%
  • Latin America
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

The portfolio's geographic allocation is predominantly in North America, accounting for 93% of its exposure. This heavy concentration may benefit from the robust U.S. market but also limits international diversification. Compared to global benchmarks, this allocation may miss growth opportunities in emerging markets or developed regions like Europe and Asia. To enhance geographic diversification and potentially reduce risk, consider increasing exposure to international markets. This can capture global growth trends and hedge against regional economic downturns.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    37%
  • Mid-cap
    15%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio's market capitalization is skewed towards mega and big-cap stocks, comprising 46% and 37% respectively. This focus on large companies can provide stability and steady growth, but may limit exposure to the higher growth potential of small and mid-cap stocks. Compared to a balanced benchmark, this allocation may lack the dynamism smaller companies can offer. To capture a broader spectrum of growth opportunities, consider increasing exposure to mid and small-cap stocks, which can offer diversification and enhance the portfolio's growth potential.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    Vanguard Growth Index Fund ETF Shares
    High correlation
  • Vanguard Total World Stock Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The portfolio contains highly correlated assets, particularly between the Invesco NASDAQ 100 ETF and the Vanguard Growth Index Fund ETF Shares. Such correlations can limit diversification benefits, as these assets may move in tandem during market shifts. In contrast, uncorrelated assets can reduce risk by balancing gains and losses. To enhance diversification, consider replacing or reducing correlated holdings with alternatives that have lower correlation. This strategy can improve risk management and potentially enhance the portfolio's risk-adjusted returns.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • VanEck Semiconductor ETF 0.50%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Weighted yield (per year) 1.24%

The portfolio's dividend yield stands at 1.24%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield at 3.90%. Dividends can provide a steady income stream and enhance total returns, especially during volatile markets. Compared to a growth-focused benchmark, this yield is relatively modest. If income generation is a priority, consider increasing allocation to dividend-paying stocks or ETFs. This can provide a cushion during downturns and offer a more balanced approach to growth and income.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is 0.10%, indicating low management costs, which is beneficial for long-term performance. Compared to industry averages, this cost structure is competitive and supports better net returns. Keeping costs low is crucial, as high fees can erode gains over time. To maintain cost efficiency, regularly review expense ratios and consider switching to lower-cost alternatives if available. This proactive approach can enhance returns and ensure your portfolio remains aligned with cost-effective investment strategies.

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 portfolio can potentially be optimized using the Efficient Frontier concept, which aims to achieve the best possible risk-return ratio. Currently, the portfolio's expected return is slightly below the optimal level. By adjusting the allocation of existing assets, you could achieve a higher expected return of 14.57% with a similar risk level. However, it's important to note that this optimization focuses solely on the current assets and doesn't account for external diversification or other investment goals. Regularly reviewing and adjusting allocations can help maintain an efficient and aligned portfolio.

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