This portfolio has only about 7.2 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced Risk Portfolio with Limited Diversification Focused on Technology and Financials

Report created on Jul 23, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio consists of four main ETFs, with a significant focus on the JPMorgan Ultra-Short Income ETF and the Vanguard Information Technology Index Fund ETF Shares, each making up 40% of the portfolio. The Vanguard Financials Index Fund ETF Shares and the Vanguard Total International Stock Index Fund ETF Shares round out the portfolio with 10% each. This composition indicates a balanced risk approach but is heavily concentrated in specific sectors, which might limit overall diversification benefits.

Growth Info

Historically, the portfolio has shown a strong performance with a Compound Annual Growth Rate (CAGR) of 14.49%. However, it has also experienced significant volatility, with a maximum drawdown of -26.21%. This suggests that while the portfolio has the potential for high returns, it also carries a risk of substantial short-term losses. Investors should be prepared for periods of high volatility and consider their risk tolerance before committing to this portfolio.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The simulation assumes a hypothetical initial investment and provides a range of possible outcomes. The 5th percentile projection shows a return of 24.48%, while the 50th percentile (median) projects a return of 327.18%, and the 67th percentile projects a return of 522.57%. The annualized return across all simulations is 12.84%. This indicates a high likelihood of positive returns but also highlights the inherent uncertainty in future performance.

Asset classes Info

  • Stocks
    59%
  • Bonds
    24%
  • Cash
    17%

The portfolio's asset allocation is primarily in stocks (59.32%), followed by bonds (23.79%) and cash (16.59%). This mix reflects a balanced risk approach, combining growth potential from stocks with stability from bonds and liquidity from cash. However, the high allocation to stocks suggests a moderate risk tolerance. To further balance risk, investors might consider increasing exposure to bonds or other low-risk asset classes.

Sectors Info

  • Technology
    41%
  • Financials
    12%
  • Industrials
    2%
  • Consumer Discretionary
    1%
  • Health Care
    1%
  • Basic Materials
    1%
  • Consumer Staples
    1%
  • Telecommunications
    1%
  • Energy
    1%

The sector allocation is heavily weighted towards technology (41.46%) and financial services (11.57%). Other sectors like industrials, consumer cyclicals, and healthcare have minimal representation. This concentration in technology and financials could lead to higher volatility and sector-specific risks. Diversifying into other sectors could help mitigate these risks and provide more stable returns.

Regions Info

  • North America
    50%
  • Europe Developed
    4%
  • Japan
    2%
  • Asia Emerging
    1%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is predominantly invested in North America (50.20%), with limited exposure to other regions like Europe Developed (4.35%) and Japan (1.65%). This lack of geographic diversification exposes the portfolio to region-specific risks. Increasing exposure to international markets could help reduce these risks and enhance overall portfolio stability.

Dividends Info

  • JPMorgan Ultra-Short Income ETF 5.20%
  • Vanguard Financials Index Fund ETF Shares 1.80%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.80%

The portfolio's dividend yield is not specified, but given the significant allocation to ETFs, it is likely to generate some level of dividend income. Dividends can provide a steady income stream and help offset some of the portfolio's volatility. Investors should consider the dividend yield when evaluating the portfolio's overall return potential.

Ongoing product costs Info

  • JPMorgan Ultra-Short Income ETF 0.18%
  • Vanguard Financials Index Fund ETF Shares 0.10%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.13%

The total expense ratio (TER) of the portfolio is 0.13%, which is relatively low. This indicates cost efficiency and ensures that a larger portion of returns is retained by the investor. Keeping costs low is crucial for long-term investment success, as high fees can erode returns over time. Investors should continue to monitor and minimize investment costs.

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