A growth-oriented portfolio with a strong technology focus and moderate geographic diversification

Report created on Dec 23, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards ETFs, with a significant concentration in growth-oriented funds. It includes 99.9% in stocks, making it highly equity-centric. This composition aligns with a growth strategy, as equities typically offer higher returns over the long term compared to bonds or cash. However, the lack of significant bond or cash holdings could expose the portfolio to higher volatility. To balance risk, consider adding fixed-income assets or cash, which can provide stability during market downturns.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 17.36%. This indicates strong growth, surpassing typical market benchmarks. However, the maximum drawdown of -29.52% suggests vulnerability to market corrections. While past performance is encouraging, it's important to remember that it doesn't guarantee future results. To mitigate potential losses, consider diversifying further or incorporating defensive assets to reduce drawdown risk.

Projection Info

The Monte Carlo simulation projects the portfolio's future performance by analyzing historical data. With 1,000 simulations, the median outcome suggests a potential 789.62% return, indicating robust growth prospects. However, it's crucial to recognize that these projections are based on past trends and assumptions, which may not hold in the future. To enhance confidence in these projections, regularly review and adjust the portfolio to reflect changing market conditions and personal goals.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is almost entirely in stocks, with negligible exposure to cash and bonds. This heavy equity focus supports growth but limits diversification. Compared to typical benchmarks, which include a mix of asset classes, this portfolio may be more susceptible to equity market volatility. To enhance diversification, consider introducing a mix of bonds or alternative investments, which can help stabilize returns and reduce risk.

Sectors Info

  • Technology
    40%
  • Health Care
    18%
  • Consumer Discretionary
    13%
  • Telecommunications
    11%
  • Financials
    6%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Energy
    1%
  • Utilities
    1%

A significant portion of the portfolio, nearly 40%, is allocated to the technology sector. While this concentration can drive growth, especially in bullish markets, it also increases vulnerability to sector-specific risks, such as regulatory changes or tech market downturns. To mitigate this risk, consider diversifying into other sectors like healthcare or consumer staples, which can provide stability and reduce reliance on technology-driven returns.

Regions Info

  • North America
    88%
  • Europe Developed
    11%

The portfolio is predominantly focused on North America, with 88.24% of assets in this region. While this aligns with the client's location, it limits exposure to international markets, which can offer growth opportunities and diversification benefits. Expanding geographic exposure, particularly in emerging markets, could enhance diversification and potentially capture higher growth rates. Consider reallocating some assets to achieve a more balanced global portfolio.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Invesco NASDAQ 100 ETF
    Vanguard Growth Index Fund ETF Shares
    High correlation

The portfolio contains highly correlated assets, particularly among growth ETFs like Schwab U.S. Large-Cap Growth ETF and Invesco NASDAQ 100 ETF. High correlation means these assets tend to move together, which can limit diversification benefits. During market downturns, this could amplify losses. To improve diversification, consider replacing some of these ETFs with less correlated assets, which can help stabilize returns and reduce overall portfolio risk.

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 can be optimized using the Efficient Frontier, which seeks the best risk-return balance. Currently, the portfolio's expected return is slightly below its optimal level. By reducing overlap among correlated assets and reallocating to achieve better diversification, the portfolio could achieve a higher expected return with the same risk. Regularly review asset correlations and adjust allocations to maintain an efficient risk-return ratio.

Dividends Info

  • Novo Nordisk A/S 1.70%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Small-Cap ETF 1.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 0.90%
  • Vanguard Growth Index Fund ETF Shares 0.30%
  • Weighted yield (per year) 0.68%

The portfolio's dividend yield is relatively low at 0.68%, reflecting its growth focus. While dividends can provide steady income, growth portfolios often prioritize capital appreciation over income generation. For investors seeking income, consider adding higher-yielding assets or dividend-focused funds. However, if capital growth remains the primary goal, the current yield may be acceptable, provided other income sources are available.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Small-Cap ETF 0.04%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, indicating cost-effective management. Low costs are beneficial as they enhance net returns over time, especially in a growth-focused portfolio. This aligns well with best practices for long-term investing. Continue to monitor costs and seek opportunities to reduce expenses further, such as by choosing lower-cost funds or negotiating fees, to maximize returns.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own 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 or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

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. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

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

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey