A high-risk growth-focused portfolio with significant exposure to alternative assets

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 focused on aggressive growth. The significant exposure to alternative assets like gold and Bitcoin indicates a willingness to embrace volatility for potentially higher returns. Ideal for those with a long-term horizon, this portfolio seeks capital appreciation over income. Investors should be comfortable with market fluctuations and potential drawdowns, aiming to capitalize on high-growth opportunities while understanding the associated risks.

Positions

  • abrdn Physical Gold Shares ETF
    SGOL - US00326A1043
    35.75%
  • iShares Bitcoin Trust
    IBIT
    28.33%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    17.06%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    8.42%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    8.19%
  • JPMorgan Nasdaq Equity Premium Income ETF
    JEPQ - US46654Q2030
    2.25%

This portfolio is heavily weighted towards alternative assets, with a notable 35.75% in abrdn Physical Gold Shares ETF and 28.33% in iShares Bitcoin Trust. The remaining allocation is primarily in equity ETFs, including Vanguard S&P 500 ETF at 17.06%. This composition indicates a strong focus on growth with a high-risk appetite. Diversification is limited due to the concentration in gold and Bitcoin. It's essential to consider adding more traditional asset classes to balance risk and potentially enhance long-term stability.

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

Growth Info

Historically, this portfolio has performed exceptionally well, boasting a Compound Annual Growth Rate (CAGR) of 36.47%. This figure suggests robust growth, likely driven by the high allocation to volatile assets like Bitcoin. However, the maximum drawdown of -10.91% indicates vulnerability to significant losses during downturns. Comparing this to a benchmark could provide insights into the portfolio's relative performance. Diversifying further could help mitigate such risks, ensuring more stable returns even in turbulent markets.

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

Projection Info

Monte Carlo simulations predict a wide range of potential outcomes for this portfolio. With 1,000 simulations, the 5th percentile projects a 461.2% increase, while the 50th percentile suggests a rise of 2,991.3%. This analysis uses historical data to model future possibilities, but it doesn't guarantee results. The optimistic projections highlight potential growth, yet the inherent volatility means outcomes can vary greatly. Consider balancing high-risk assets with more stable investments to achieve a more predictable performance over time.

Asset classes Info

  • Other
    64%
  • Stocks
    35%
  • No data
    0%
  • Cash
    0%

The portfolio's asset allocation is heavily skewed, with 64% in alternative assets and 35% in stocks. This imbalance limits diversification benefits, potentially increasing risk. While alternative assets can offer high returns, they may also lead to substantial volatility. A more balanced allocation, incorporating fixed income or other traditional asset classes, could enhance diversification and provide a cushion against market fluctuations. This approach aligns with broader investment strategies, promoting long-term portfolio health.

Sectors Info

  • Technology
    11%
  • Financials
    4%
  • Health Care
    4%
  • Consumer Discretionary
    4%
  • Telecommunications
    4%
  • Industrials
    3%
  • Consumer Staples
    2%
  • Energy
    2%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    0%

The sectoral allocation is relatively balanced, with technology at 11% and other sectors like financial services, healthcare, and consumer cyclicals each around 4%. This distribution mirrors common benchmarks, providing a degree of sectoral diversification. However, the overall impact is limited due to the high concentration in alternative assets. Maintaining a diverse sectoral exposure can help manage sector-specific risks, especially during economic shifts. Consider increasing allocations to underrepresented sectors to improve diversification and resilience.

Regions Info

  • North America
    36%
  • Europe Developed
    0%
  • Latin America
    0%
  • Asia Developed
    0%
  • Asia Emerging
    0%

Geographically, the portfolio is concentrated in North America at 36%, with no exposure to other regions. This lack of geographic diversification could increase vulnerability to regional economic downturns. Global diversification can help mitigate such risks by spreading investments across various economic environments. Consider incorporating international equities to achieve a more balanced geographic exposure, aligning with global benchmarks and enhancing the portfolio's ability to withstand regional market fluctuations.

Market capitalization Info

  • Mega-cap
    14%
  • Large-cap
    14%
  • Mid-cap
    6%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio's market capitalization distribution is skewed towards mega and big caps, each at 14%, with medium and small caps having minimal exposure. This focus on larger companies might offer stability but can limit growth potential from smaller, emerging firms. Including a broader range of market capitalizations could enhance diversification, tapping into the growth potential of smaller companies. This approach can complement existing holdings, potentially boosting overall returns while managing risk.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    High correlation

The portfolio contains highly correlated assets, particularly between Schwab U.S. Large-Cap Growth ETF and JPMorgan Nasdaq Equity Premium Income ETF. High correlation means these assets tend to move in tandem, reducing diversification benefits. In market downturns, this could lead to amplified losses. Consider diversifying with assets that have lower correlations to each other, which can help manage risk and improve the portfolio's resilience to market volatility.

Dividends Info

  • JPMorgan Nasdaq Equity Premium Income ETF 10.70%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Vanguard S&P 500 ETF 1.00%
  • Weighted yield (per year) 0.67%

The portfolio's dividend yield is relatively low at 0.67%, with the highest contribution from JPMorgan Nasdaq Equity Premium Income ETF at 10.70%. Dividends can provide a steady income stream, especially in volatile markets. Given the growth focus, the low yield aligns with the portfolio's strategy. However, incorporating higher-yielding assets could offer additional income, enhancing total returns. Balancing growth and income can create a more robust portfolio, catering to both capital appreciation and income needs.

Ongoing product costs Info

  • iShares Bitcoin Trust 0.12%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • abrdn Physical Gold Shares ETF 0.17%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.12%

The portfolio's total expense ratio (TER) is impressively low at 0.12%, indicating cost efficiency. Low costs enhance long-term returns by minimizing the drag on performance. This alignment with best practices supports the portfolio's growth objectives. Regularly reviewing expenses can ensure continued cost-effectiveness. Consider maintaining this cost discipline while exploring new investment opportunities, as reducing unnecessary fees is crucial for maximizing net returns and achieving financial goals.

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's current risk-return profile can potentially be optimized using the Efficient Frontier. This method seeks the best possible risk-return ratio by adjusting asset allocations. Currently, an optimized version could yield an expected return of 33.21% with a risk level of 13.00%. While this optimization focuses on existing assets, it highlights the importance of strategic allocation. Reassessing asset weights could enhance efficiency, balancing growth and risk in line with the portfolio's objectives.

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