A growth-focused ETF-heavy portfolio with high U.S. market exposure and tech concentration

Report created on Mar 6, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio consists entirely of ETFs, with a heavy emphasis on U.S. equities. The Vanguard FTSE All-World UCITS ETF holds the largest weight, followed by the iShares Core S&P 500 ETF and Invesco QQQ Trust. The allocation leans heavily towards large-cap stocks, reflecting a growth-oriented strategy. Compared to a typical balanced portfolio, this one shows a strong preference for U.S. market exposure and technology sectors, which could lead to higher volatility. Consider diversifying with assets outside the U.S. and across different sectors to reduce concentration risk and improve portfolio balance.

Growth Info

The historical performance of this portfolio is impressive, with a Compound Annual Growth Rate (CAGR) of 27.47%. This growth rate indicates significant returns, although it's important to remember that past performance doesn't guarantee future results. The maximum drawdown of -30.20% highlights the portfolio's susceptibility to market downturns, a common risk for growth-focused portfolios. To mitigate potential losses, consider strategies such as rebalancing or introducing less volatile assets, which can provide a buffer during market turbulence while maintaining growth potential.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of outcomes, with a median return of 1,927.7% and an annualized return of 30.96%. Monte Carlo analysis involves running numerous hypothetical scenarios to estimate potential future returns, using historical data as a guide. However, it's crucial to note that these projections are not predictions and can vary widely based on market conditions. While the optimistic projections are encouraging, maintaining a diversified asset base can help manage risk and capitalize on opportunities across different market environments.

Asset classes Info

  • Stocks
    70%
  • Other
    1%

The portfolio is predominantly composed of stocks, accounting for 70% of the total allocation. This high equity exposure aligns with a growth-oriented investment strategy but also increases volatility. A typical diversified portfolio may include a mix of bonds, commodities, and cash to balance risk and reward. Consider incorporating additional asset classes to reduce overall portfolio risk and enhance stability. This approach can help cushion against downturns in equity markets, providing a more consistent return profile over time.

Sectors Info

  • Technology
    28%
  • Telecommunications
    10%
  • Consumer Discretionary
    9%
  • Financials
    7%
  • Health Care
    5%
  • Industrials
    4%
  • Consumer Staples
    4%
  • Energy
    1%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

The portfolio is heavily concentrated in the technology sector, which comprises 28% of the allocation. While tech stocks have driven significant growth in recent years, they can be more volatile, especially during periods of interest rate hikes or regulatory changes. The portfolio also includes exposure to communication services and consumer cyclicals, but other sectors like healthcare and financial services are underrepresented. To achieve better sector diversification, consider increasing exposure to less volatile sectors, which can provide stability during tech sector downturns.

Regions Info

  • North America
    70%
  • Europe Developed
    1%

Geographic allocation is heavily skewed towards North America, with 70% of the portfolio's assets invested in this region. This concentration exposes the portfolio to regional economic risks and limits global diversification. A typical benchmark might include a more balanced geographic spread, with allocations to Europe, Asia, and emerging markets. Consider diversifying geographically to capture growth opportunities in other regions and reduce reliance on the U.S. market. This strategy can help mitigate risks associated with economic downturns in a single region.

Market capitalization Info

  • Mega-cap
    33%
  • Large-cap
    24%
  • Mid-cap
    13%
  • Small-cap
    1%

The portfolio is predominantly invested in large-cap stocks, with 33% in mega caps and 24% in big caps. Large-cap stocks are generally considered more stable but offer less growth potential than smaller companies. The lack of small-cap and micro-cap exposure limits the portfolio's potential to capitalize on high-growth opportunities. A balanced approach might include a mix of market capitalizations to capture different growth dynamics. Consider increasing exposure to smaller-cap stocks to enhance growth potential and diversify risk across different company sizes.

Redundant positions Info

  • Vanguard S&P 500 ETF
    iShares Core S&P 500 ETF
    High correlation

The portfolio includes highly correlated assets, such as the Vanguard S&P 500 ETF and iShares Core S&P 500 ETF. High correlation means these assets tend to move in the same direction, which can limit diversification benefits. During market downturns, correlated assets may all decline simultaneously, increasing portfolio risk. To improve diversification, consider replacing some of these highly correlated assets with those that have lower correlation to the existing portfolio. This strategy can help reduce volatility and enhance risk-adjusted returns.

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.

Click on the colored dots to explore allocations.

The portfolio has room for optimization on the Efficient Frontier, a concept that represents the best possible risk-return trade-off. By adjusting the allocation among existing assets, the portfolio can achieve a more efficient balance between risk and return. This optimization focuses on maximizing returns for a given level of risk, without necessarily diversifying across new assets. Consider rebalancing the current asset weights to align more closely with the Efficient Frontier, potentially enhancing returns without increasing overall risk.

Dividends Info

  • iShares Core S&P 500 ETF 1.30%
  • Invesco QQQ Trust 0.60%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.67%

The portfolio's dividend yield is relatively low, at 0.67%, reflecting its growth-oriented focus. While dividends can provide a steady income stream, growth portfolios often prioritize capital appreciation over income generation. For investors seeking higher income, increasing allocation to dividend-paying stocks or funds could enhance cash flow. However, this may come at the expense of growth potential. Balancing growth and income objectives can create a more resilient portfolio, especially during periods of market volatility or interest rate changes.

Ongoing product costs Info

  • ARK Next Generation Internet ETF 0.87%
  • iShares Core S&P 500 ETF 0.03%
  • Invesco QQQ Trust 0.20%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.12%

The portfolio's total expense ratio (TER) is 0.12%, which is relatively low and favorable for long-term investors. Lower costs can significantly improve net returns over time, as fees can erode gains. The ARK Next Generation Internet ETF has a higher expense ratio of 0.87%, which might impact overall cost efficiency. Consider evaluating whether the potential returns justify this higher cost. Additionally, regularly reviewing and comparing expense ratios can help ensure the portfolio remains cost-effective, maximizing long-term growth potential.

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