A tech-focused portfolio with moderate diversification and potential for high growth

Report created on Jan 26, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of two ETFs: iShares Core Equity and TD Global Technology Leaders, making up 98% of the allocation. A small portion is invested in Fidelity Advantage Bitcoin ETF. This structure leans heavily towards equities, particularly in technology, with limited exposure to alternative investments. Compared to a balanced benchmark, this portfolio is less diversified. A more evenly distributed allocation across different asset classes could enhance stability. Consider introducing more fixed-income or alternative assets to mitigate risk and provide a buffer during market downturns.

Growth Info

Historically, the portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 14.36%, indicating robust past performance. However, the maximum drawdown of -27.01% highlights significant volatility. This performance is impressive compared to typical balanced portfolios, but it's crucial to remember that past success doesn't guarantee future gains. To manage risk, consider incorporating assets that could potentially reduce volatility without sacrificing too much return, such as bonds or real estate investments.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. With 1,000 simulations, the median outcome is a substantial 915.8% growth, while the 5th percentile indicates a potential loss. This variance underscores the portfolio's potential for high returns but also significant risk. Keep in mind that simulations are not predictions; they merely explore possibilities. Regularly review the portfolio's risk profile to ensure it aligns with your investment goals and risk tolerance.

Asset classes Info

  • US Equity
    65%
  • Stocks
    13%
  • Other
    2%

The portfolio's asset class allocation is heavily weighted towards US equities at 65%, with a minor inclusion of other asset classes. This concentration may limit diversification benefits, as equities can be volatile. Compared to balanced benchmarks, this allocation is more aggressive. Diversifying into fixed-income securities or commodities could provide stability and reduce overall risk. Consider gradually reallocating a portion of the equity exposure to diversify across different asset classes.

Sectors Info

  • Technology
    40%
  • Financials
    13%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Industrials
    7%
  • Health Care
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Consumer Staples
    3%
  • Real Estate
    2%
  • Utilities
    1%

Technology dominates the sector allocation at 40%, followed by financial services and consumer cyclicals. This tech-heavy focus can lead to significant volatility, especially during economic shifts or interest rate changes. While the potential for high returns exists, the lack of balance across sectors could be a concern. To mitigate risk, consider diversifying into more defensive sectors like healthcare or utilities, which tend to perform well during economic downturns.

Regions Info

  • North America
    78%
  • Europe Developed
    10%
  • Japan
    5%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Australasia
    1%

The portfolio's geographic exposure is predominantly in North America, accounting for 78% of the allocation. This concentration may expose you to regional risks, such as economic downturns or policy changes. Compared to global benchmarks, this allocation is less diversified. Expanding exposure to emerging markets or underrepresented regions like Latin America or Africa could enhance diversification and provide new growth opportunities. Consider gradually increasing allocations in these areas.

Market capitalization Info

  • Mega-cap
    55%
  • Large-cap
    26%
  • Mid-cap
    13%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio is heavily weighted towards mega and big-cap stocks, making up 81% of the allocation. This focus on large-cap companies can provide stability but may limit growth potential compared to small-cap stocks. While large caps are generally less volatile, incorporating more small and mid-cap stocks can offer greater growth opportunities. Consider diversifying across different market capitalizations to balance stability with growth potential.

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's current allocation may not sit on the Efficient Frontier, which represents the best possible risk-return balance. Adjusting the weights of existing assets could potentially enhance efficiency. This optimization focuses on achieving the highest return for a given level of risk, not necessarily diversification. Consider using portfolio optimization tools to explore different allocation scenarios and identify opportunities for improvement.

Dividends Info

  • iShares Core Equity Portfolio 2.00%
  • Weighted yield (per year) 1.04%

The iShares Core Equity Portfolio offers a 2.00% dividend yield, contributing to the overall yield of 1.04%. This yield is modest and may not significantly impact total returns. Dividends can provide a steady income stream, which is beneficial for investors seeking regular cash flow. To increase the portfolio's yield, consider adding dividend-focused investments. However, ensure that such additions align with your overall investment strategy and risk tolerance.

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