High-risk portfolio with a major stake in a single stock and diversified ETF investments

Report created on Jun 9, 2025

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards TMC the Metals Company Inc, comprising 80.84% of the total investment, revealing a significant concentration risk. The remaining allocation includes 11.75% in the Global X Robotics & Artificial Intelligence ETF and 7.41% in the Schwab S&P 500 Index Fund. Such a distribution indicates a speculative strategy, leaning heavily on the performance of a single stock, while attempting to balance with broader market and sectoral ETFs.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 27.80%, which is impressive. However, the maximum drawdown of -81.62% signals extreme volatility and potential for substantial losses. The fact that 90% of returns come from a single day suggests the performance is highly unpredictable and reliant on rare, significant gains.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, indicate a wide range of potential portfolio values. With a 5th percentile outcome at -97.9% and a 67th percentile at 212.6%, the simulations underscore the portfolio's speculative nature. The fact that only slightly more than half of the simulations result in positive returns further emphasizes the high-risk profile.

Asset classes Info

  • Stocks
    100%

The portfolio is solely invested in stocks, with no allocation to cash or other asset classes. This lack of diversification across asset classes can amplify risk, as all investments are subject to the same market forces. Including other asset classes could help mitigate this risk and provide more stability.

Sectors Info

  • Basic Materials
    81%
  • Technology
    7%
  • Industrials
    5%
  • Health Care
    2%
  • Financials
    1%
  • Consumer Discretionary
    1%
  • Telecommunications
    1%

The sectoral distribution is heavily skewed towards Basic Materials, due to the large stake in TMC the Metals Company Inc. While there is some diversification into Technology, Industrials, and Healthcare, the overwhelming focus on a single sector increases susceptibility to sector-specific downturns. Broadening sector exposure could help reduce this vulnerability.

Regions Info

  • North America
    94%
  • Japan
    4%
  • Europe Developed
    2%
  • Asia Emerging
    1%

Geographically, the portfolio is heavily concentrated in North America (94%), with minimal exposure to Japan, Europe, and Asia. This concentration in a single region can limit growth opportunities and increase exposure to region-specific economic risks. Expanding geographic diversification could enhance resilience and potential for growth.

Market capitalization Info

  • Small-cap
    84%
  • Mega-cap
    7%
  • Large-cap
    6%
  • Mid-cap
    3%

The portfolio's market capitalization exposure is predominantly in small-cap stocks (84%), which are typically more volatile but offer higher growth potential. The minimal exposure to mega, big, and medium-cap stocks suggests a lack of balance that could be adjusted to reduce volatility and improve risk-adjusted returns.

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.

Considering the Efficient Frontier, this portfolio could benefit from optimization to achieve a better risk-return ratio. Currently, the heavy reliance on a single stock and sector, combined with the lack of asset class diversification, likely places the portfolio far from the Efficient Frontier. Adjusting the asset allocation to include a broader mix could improve the portfolio's efficiency.

Dividends Info

  • Global X Robotics & Artificial Intelligence ETF 0.10%
  • Schwab S&P 500 Index Fund 1.20%
  • Weighted yield (per year) 0.10%

The dividend yield from the ETFs is relatively low, contributing minimally to the portfolio's overall returns. Given the speculative nature of the portfolio, this is expected, but incorporating higher-yielding investments could provide a more stable income stream and reduce reliance on capital gains.

Ongoing product costs Info

  • Global X Robotics & Artificial Intelligence ETF 0.68%
  • Schwab S&P 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.08%

The portfolio's costs are relatively low, with the Total Expense Ratio (TER) for the ETFs averaging at 0.08%. This is a positive aspect, as lower costs can significantly enhance long-term returns. Maintaining focus on cost efficiency is advisable, especially in a high-risk investment strategy.

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