High Growth Potential Portfolio with Heavy Emphasis on US Equities and Limited International 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

Balanced Investors

This portfolio suits an investor with a high-risk tolerance and a long-term investment horizon, seeking substantial capital appreciation. The heavy allocation to US equities and technology-focused sectors indicates a preference for growth over income or stability. This investor is likely comfortable with market volatility and has the patience to weather potential downturns, aiming for significant returns over time.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    94.85%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    2.60%
  • SoFi Technologies Inc.
    SOFI - US83406F1021
    1.25%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    1.03%
  • JPMorgan Nasdaq Equity Premium Income ETF
    JEPQ - US46654Q2030
    0.27%

This portfolio is heavily weighted towards US equities, with a staggering 94.85% in Vanguard S&P 500 ETF, followed by smaller allocations in Invesco NASDAQ 100 ETF and a very minor position in SoFi Technologies Inc. The diversification is notably low, with nearly all investments focused on large-cap stocks within the US market. The inclusion of Vanguard Total International Stock Index Fund ETF at just over 1% attempts to offer some international exposure, but it's minimal.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 16.53%, with a maximum drawdown of -19.16%. These figures indicate a strong performance trend, albeit with significant volatility. The days contributing to 90% of returns being limited to just 15 suggests that the portfolio's gains are highly concentrated, which could imply risk from market timing sensitivity.

Projection Info

Using Monte Carlo simulations, which forecast future performance based on historical data, the portfolio shows a wide range of outcomes. The median simulation suggests a potential 1,508.9% return, highlighting the portfolio's growth potential. However, it's crucial to remember that these simulations are speculative and depend heavily on past market behavior, which may not predict future movements accurately.

Asset classes Info

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

The portfolio is entirely invested in stocks, showing a strong preference for equity investments over bonds, real estate, or cash equivalents. This asset class allocation is aggressive and aligns with a growth-focused strategy but lacks the balance that might protect against market downturns.

Sectors Info

  • Technology
    34%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

Sector allocation is concentrated in technology, financial services, and consumer cyclicals, reflecting a bet on sectors that have historically led market growth. However, this concentration increases vulnerability to sector-specific downturns, particularly in the technology sector, which is known for its volatility.

Regions Info

  • North America
    99%
  • Europe Developed
    1%
  • Asia Emerging
    0%
  • Asia Developed
    0%
  • Japan
    0%
  • Australasia
    0%
  • Latin America
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

With 99% of assets in North America, primarily the US, the portfolio's geographic exposure is highly concentrated. This focus on the US market limits exposure to potential growth in developed and emerging markets outside the US, potentially missing out on diversification benefits and global growth opportunities.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    35%
  • Mid-cap
    17%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio's emphasis on mega and big-cap stocks, totaling 81%, underscores a preference for well-established companies. While this can offer stability, the limited exposure to medium, small, and micro-cap stocks may restrict potential for outsized gains from smaller, faster-growing companies.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    Vanguard S&P 500 ETF
    High correlation

The high correlation among the ETFs focused on the NASDAQ and S&P 500 indices suggests redundancy in the portfolio, limiting diversification benefits. This overlap, particularly between the Vanguard S&P 500 ETF and Invesco NASDAQ 100 ETF, indicates an area for potential optimization by reducing similar holdings.

Dividends Info

  • JPMorgan Nasdaq Equity Premium Income ETF 10.70%
  • Invesco NASDAQ 100 ETF 0.50%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 1.11%

The dividend yield across the portfolio averages to 1.11%, with the JPMorgan Nasdaq Equity Premium Income ETF offering a substantial 10.70% yield. While dividends contribute to the portfolio's total return, the overall yield suggests a focus on capital appreciation over income generation.

Ongoing product costs Info

  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.03%

The portfolio's total expense ratio (TER) is remarkably low, averaging 0.03%, which is beneficial for long-term growth as lower costs translate directly into higher net returns. This cost efficiency is a strong aspect of the portfolio's construction.

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.

Optimizing the portfolio could involve reducing the overlap in highly correlated assets to enhance diversification benefits. By reallocating some of the funds from the S&P 500 and NASDAQ ETFs into assets with lower correlation, the portfolio could achieve a more balanced risk-return profile.

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