A growth-focused portfolio with a strong tech emphasis and high North American 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
Growth Investors
This portfolio suits an investor with a high risk tolerance focused on aggressive growth. Ideal for someone with a long-term horizon, it leverages heavy tech exposure and North American assets to seek significant capital appreciation. The investor should be comfortable with volatility and potential drawdowns, as the tech concentration can lead to sharp fluctuations. This approach is best for those aiming to maximize growth rather than seeking steady income or low-risk stability.
Positions
-
Vanguard FTSE All-World UCITS ETF USD Accumulation
VWCE - IE00BK5BQT80 70.00% -
Xtrackers MSCI World Information Technology UCITS ETF 1C
XDWT - IE00BM67HT60 10.00% -
Amazon.com Inc
AMZ - US0231351067 5.00% -
Meta Platforms Inc
FB2A - US30303M1027 5.00% -
Netflix Inc
NFC - US64110L1061 5.00% -
NVIDIA Corporation
NVD - US67066G1040 5.00%
The portfolio is heavily weighted towards ETFs, with the Vanguard FTSE All-World UCITS ETF making up 70%. This provides broad market exposure, aligning with common growth-focused portfolios. Additionally, there is a 10% allocation to the Xtrackers MSCI World Information Technology ETF, enhancing tech exposure. The remaining 20% is split evenly among four tech giants: Amazon, Meta, Netflix, and NVIDIA. This concentration in tech stocks increases potential for high returns but also amplifies risk. Balancing these allocations with more defensive sectors could stabilize performance.
Growth
The portfolio has demonstrated robust historical performance, with a Compound Annual Growth Rate (CAGR) of 19.45%. This impressive growth rate suggests strong past returns, especially when compared to global benchmarks. However, a maximum drawdown of -30.69% indicates significant volatility, a common trait in tech-heavy portfolios. While past performance is encouraging, it’s essential to remember that it does not guarantee future results. To mitigate potential downturns, consider incorporating assets with historically lower volatility.
Projection
Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes. With 1,000 simulations, the median (50th percentile) outcome predicts a 4,737.92% return. The 5th percentile projects a 454.52% return, indicating variability. Monte Carlo simulations use historical data to model future scenarios, but they cannot predict exact outcomes. While the projections are optimistic, diversifying further could reduce risk. Consider adjusting the portfolio to include more stable asset classes to balance potential volatility.
Asset classes
- Stocks 100%
- Other 0%
- No data 0%
The portfolio is overwhelmingly composed of stocks, accounting for nearly 100% of the allocation. This heavy equity weighting aligns with a growth-focused strategy but limits diversification across asset classes. A more diversified portfolio typically includes bonds or other asset types to mitigate risk. By introducing fixed-income securities or alternatives, you could enhance stability and reduce reliance on equity market performance. This adjustment could provide a buffer during market downturns.
Sectors
- Technology 33%
- Telecommunications 16%
- Consumer Discretionary 12%
- Financials 12%
- Health Care 7%
- Industrials 7%
- Consumer Staples 4%
- Energy 3%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
Technology dominates the sector allocation, comprising approximately 33% of the portfolio. While this offers potential for high growth, it also exposes the portfolio to sector-specific risks, such as regulatory changes or market saturation. Other sectors like Communication Services and Consumer Cyclicals are also significant but less concentrated. To enhance resilience, consider diversifying into sectors with lower correlation to technology. This can help manage volatility and provide a more balanced risk-return profile.
Regions
- North America 75%
- Europe Developed 11%
- Japan 4%
- Asia Emerging 4%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
- Europe Emerging 0%
The portfolio is heavily skewed towards North American assets, representing 75%. This concentration offers exposure to a strong, mature market but limits geographic diversification. Other regions, such as Europe and Asia, are underrepresented, which could miss out on growth opportunities in emerging markets. To better balance regional exposure, consider increasing allocations to underrepresented areas. This could enhance diversification and reduce reliance on the North American market's performance.
Ongoing product costs
- Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
- Xtrackers MSCI World Information Technology UCITS ETF 1C 0.25%
- Weighted costs total (per year) 0.18%
The portfolio's Total Expense Ratio (TER) is 0.18%, which is impressively low. This cost efficiency supports better long-term performance by minimizing the drag on returns. Low costs are a hallmark of effective portfolio management, allowing more of the portfolio's gains to be retained. While the current TER is favorable, regularly reviewing and comparing fund fees can ensure continued cost-effectiveness. Consider exploring options to maintain or reduce expenses further.
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.
The portfolio's current allocation could be optimized using the Efficient Frontier, which seeks the best risk-return trade-off. By adjusting the weights of existing assets, you could potentially enhance returns for the same level of risk or reduce risk for the same level of return. This optimization does not necessarily involve adding new assets but rather reallocating among current holdings. Regularly reassessing and rebalancing can help maintain an optimal risk-return balance.
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