A growth-focused portfolio with significant exposure to the US and technology sectors

Report created on Jan 19, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with a significant 70% allocation to the Vanguard S&P 500 ETF. This dominance indicates a strong focus on established large-cap US stocks. The remaining allocations are split equally between the VanEck Semiconductor ETF and the Vanguard Total International Stock Index Fund ETF Shares. Compared to typical growth portfolios, this composition leans heavily on US markets, offering broad exposure but limited diversification across asset classes. To enhance diversification, consider integrating other asset classes like bonds or real estate.

Growth Info

Historically, the portfolio has demonstrated robust performance, achieving a Compound Annual Growth Rate (CAGR) of 15.05%. However, it also experienced a maximum drawdown of -33.28%, reflecting its vulnerability to market downturns. This performance is impressive but highlights the inherent volatility associated with growth-focused investments. To mitigate potential losses during downturns, consider strategies such as increasing cash reserves or incorporating more defensive assets to balance risk and reward.

Projection Info

The Monte Carlo simulation, which uses historical data to forecast potential future outcomes, suggests a positive outlook with an annualized return of 17.42%. Although 987 out of 1,000 simulations showed positive returns, it's crucial to remember that past performance doesn't guarantee future results. This forward-looking analysis underscores the portfolio's potential for substantial growth, but also its susceptibility to market fluctuations. Regularly review the portfolio to ensure it aligns with your risk tolerance and investment horizon.

Asset classes Info

  • Stocks
    99%

The portfolio is overwhelmingly concentrated in stocks, accounting for over 99% of the allocation. This high concentration in a single asset class suggests a strong growth orientation but also exposes the portfolio to significant market risk. While stocks offer high return potential, they can be volatile. To enhance stability, consider diversifying into other asset classes such as bonds or real estate, which can provide a buffer against stock market volatility.

Sectors Info

  • Technology
    40%
  • Financials
    13%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Industrials
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio exhibits a notable concentration in the technology sector, which constitutes nearly 40% of the allocation. This focus aligns with recent market trends favoring tech growth but may increase volatility, especially during economic shifts or regulatory changes. While tech investments can drive substantial returns, it's wise to monitor sector exposure and consider balancing with other sectors like healthcare or consumer goods to reduce sector-specific risks.

Regions Info

  • North America
    83%
  • Europe Developed
    7%
  • Asia Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily skewed towards North America, with over 82% of assets allocated there. This concentration provides a strong foothold in a stable and developed market but limits exposure to potential growth opportunities in emerging markets. To achieve better geographic diversification, consider increasing allocations to regions like Asia or Latin America, which may offer higher growth potential and reduce reliance on North American markets.

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 can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. By adjusting the weights of existing assets, you can potentially enhance returns without increasing risk. However, this optimization is based solely on the current assets and may not consider other diversification goals. Regularly reassess asset weights to ensure they align with your risk tolerance and investment objectives.

Dividends Info

  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 1.41%

With a total dividend yield of 1.41%, the portfolio offers modest income potential. The Vanguard Total International Stock Index Fund ETF Shares contributes the highest yield at 3.4%, while the other ETFs provide lower yields. For growth-oriented investors, dividends may not be a primary focus, but reinvesting them can enhance long-term returns. Consider whether the current yield aligns with your income needs and adjust allocations if necessary.

Ongoing product costs Info

  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is impressively low at 0.09%, which supports better long-term performance by minimizing costs. The Vanguard S&P 500 ETF, with a TER of 0.03%, is particularly cost-effective. Keeping costs low is crucial for maximizing returns, especially in a growth-focused portfolio. Regularly review the cost structure to ensure it remains competitive, and consider lower-cost alternatives if available.

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