A growth-oriented portfolio with a strong focus on technology and moderate international exposure

Report created on Jan 12, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards stock funds, making up over 86% of the total allocation. The remaining minor allocations are in cash, bonds, and other categories. This composition aligns with a growth-focused strategy, emphasizing capital appreciation over income generation. A typical growth portfolio often has a high equity allocation to harness potential market gains. To ensure this strategy is effective, regular reviews of asset allocation against financial goals and risk tolerance are essential. Maintaining this high equity level can be beneficial for growth, but it also implies higher volatility, which should be considered.

Growth Info

Historically, the portfolio has demonstrated impressive performance, with a Compound Annual Growth Rate (CAGR) of 18.84%. This growth rate is significantly higher than many benchmarks, reflecting the portfolio's strong growth focus. However, the maximum drawdown of -34.35% indicates substantial volatility, a common trait in growth-oriented portfolios. While past performance is not indicative of future results, understanding these metrics helps set realistic expectations. It's crucial to prepare for potential downturns by considering diversification or risk management strategies to mitigate losses during volatile periods.

Projection Info

Monte Carlo simulations project potential future performance by analyzing historical data to generate a range of possible outcomes. The portfolio's simulations show a median outcome of 855.03% growth, with a positive return in 995 out of 1,000 scenarios. These results suggest a high likelihood of continued growth, albeit with inherent uncertainties. Remember, these projections are not guarantees but rather estimates based on past trends. It's wise to regularly reassess the portfolio's alignment with personal goals and risk tolerance, especially as market conditions change.

Asset classes Info

  • Stocks
    86%
  • Cash
    1%

The portfolio's asset class allocation is predominantly in stocks, which supports its growth classification. This high equity exposure can drive substantial returns but also increases risk. A more balanced allocation might include a higher proportion of bonds or alternative investments to reduce volatility. Comparing this to typical balanced portfolios, diversification across asset classes is limited here. To enhance stability, consider incrementally increasing bond allocations, especially if nearing retirement or requiring more income stability.

Sectors Info

  • Technology
    43%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Financials
    7%
  • Health Care
    6%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Energy
    1%
  • Utilities
    1%

A significant concentration in the technology sector, making up 42.53% of the portfolio, highlights a strong sectoral bias. While this can capitalize on tech growth, it also exposes the portfolio to sector-specific risks, such as regulatory changes or market shifts. In comparison, benchmarks often have a more balanced sector distribution. Diversifying into underrepresented sectors could reduce risk and enhance resilience against sector downturns. Consider reviewing sector allocations regularly to ensure they align with broader market trends and personal risk tolerance.

Regions Info

  • North America
    54%
  • Europe Developed
    23%
  • Asia Developed
    4%
  • Japan
    3%
  • Asia Emerging
    1%
  • Australasia
    1%
  • Latin America
    1%

The portfolio is heavily weighted towards North America, with 53.84% exposure, followed by Europe Developed at 23.19%. This geographic distribution provides moderate international diversification but lacks significant exposure to emerging markets, which can offer growth potential. Compared to global benchmarks, there's an opportunity to enhance diversification by increasing exposure to regions like Asia or Latin America. Doing so might capture growth opportunities in developing economies while spreading risk across different economic environments.

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 balances risk and return for the given assets. This method identifies the best asset allocation for the desired risk level, enhancing the portfolio's efficiency. While the current allocation supports growth, slight adjustments might improve the risk-return ratio. Consider using optimization tools to explore potential reallocations that maintain growth while reducing volatility. This approach ensures the portfolio is structured to achieve the best possible returns relative to its risk.

Dividends Info

  • Fidelity Water Sustainability Fund 0.40%
  • Fidelity Select Semiconductors Portfolio 3.90%
  • VANGUARD INFORMATION TECHNOLOGY INDEX FUND ADMIRAL SHARES 0.50%
  • VANGUARD DEVELOPED MARKETS INDEX FUND ADMIRAL SHARES 1.80%
  • Weighted yield (per year) 0.89%

The overall dividend yield of 0.89% reflects a focus on growth rather than income. While dividends can provide a steady income stream, they are not a primary component of this portfolio's strategy. For investors seeking income, increasing allocations to high-dividend stocks or funds could be beneficial. However, given the growth focus, reinvesting dividends to compound returns might be a more suitable approach. Balancing growth with income-generating assets could enhance the portfolio's overall return profile and provide additional cash flow.

Ongoing product costs Info

  • American Century Non-U.S. IntrinsicValue Fund A Class 1.44%
  • Fidelity Select Semiconductors Portfolio 0.65%
  • OAKMARK INTERNATIONAL SMALL CAP FUND INVESTOR CLASS 1.34%
  • PUTNAM GROWTH OPPORTUNITIES FUND CLASS A SHARES 0.92%
  • SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES 0.03%
  • VANGUARD INFORMATION TECHNOLOGY INDEX FUND ADMIRAL SHARES 0.10%
  • VANGUARD DEVELOPED MARKETS INDEX FUND ADMIRAL SHARES 0.08%
  • Weighted costs total (per year) 0.60%

With a Total Expense Ratio (TER) of 0.6%, the portfolio's costs are relatively low, supporting better long-term performance. Lower costs mean more of your investment returns stay in your pocket, compounding over time. While some funds have higher fees, such as the American Century Non-U.S. IntrinsicValue Fund at 1.44%, the overall cost remains competitive. Regularly reviewing fund fees and considering lower-cost alternatives can optimize net returns. It's important to weigh cost against performance to ensure value for money in fund selections.

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