Balanced Growth Portfolio with Moderate Risk and Diversification Suitable for Growth-Oriented Investors

Report created on Jul 9, 2024

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.

Positions

The portfolio consists of a mix of ETFs, common stocks, and various asset classes. With a total of 19 positions, it leans heavily towards equities, which make up about 85.7% of the portfolio. The rest is spread across bonds, cash, and other asset classes. This composition suggests a growth-oriented strategy, aiming to capitalize on stock market gains. While the diversification is moderate, the portfolio includes a range of sectors and geographies, providing some balance. However, the concentration in equities indicates a higher risk profile, which might not suit everyone.

Growth Info

Historically, the portfolio has shown strong performance with a compound annual growth rate (CAGR) of 15.53%. This suggests that a hypothetical initial investment would have grown significantly over time. However, the maximum drawdown of -18.99% highlights the potential volatility and risk involved. The fact that 90% of returns were generated in just 8 days indicates a reliance on specific market movements. This performance is impressive but also underscores the importance of understanding the risks associated with such a growth-focused strategy.

Projection Info

Using a Monte Carlo simulation with 1,000 scenarios, the forward projection shows a wide range of possible outcomes for a hypothetical initial investment. The median scenario suggests a 209.77% increase, while the 67th percentile indicates potential returns of up to 500.23%. However, there's also a 5% chance of a significant loss of -72.6%. With 776 simulations showing positive returns, the annualized return across all simulations is 16.63%. This highlights both the potential upside and the inherent risk, stressing the need for careful consideration of one's risk tolerance.

Asset classes Info

  • Stocks
    86%
  • Bonds
    7%
  • Cash
    4%
  • Other
    2%
  • No data
    1%

The portfolio is predominantly composed of stocks, making up 85.7% of the total allocation. Bonds account for a modest 6.9%, while cash and other asset classes fill the remaining portions. This allocation reflects a strong emphasis on growth, with limited exposure to fixed income for stability. The high stock allocation aligns with a growth-oriented investment strategy, but it also increases vulnerability to market fluctuations. To mitigate risk, consider a more balanced allocation by incorporating additional bonds or other less volatile assets.

Sectors Info

  • Technology
    27%
  • Consumer Discretionary
    14%
  • Financials
    10%
  • Health Care
    9%
  • Industrials
    8%
  • Telecommunications
    7%
  • Utilities
    5%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    1%

Sector allocation is diverse, with a significant focus on technology at 27.14%, followed by consumer cyclicals, financial services, and healthcare. This exposure to high-growth sectors can drive returns but also introduces sector-specific risks. The portfolio's broad sector coverage provides some diversification, yet the heavy concentration in technology could lead to increased volatility. To enhance stability, consider diversifying further across sectors, reducing reliance on any single sector, and potentially incorporating more defensive industries.

Regions Info

  • North America
    79%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    1%
  • Asia
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, which comprises 79.12% of the allocation. Other regions, such as Europe and Asia, have minimal representation. This concentration in North America may limit exposure to global growth opportunities and increase vulnerability to regional economic downturns. Expanding geographic diversification could provide a more balanced risk profile and tap into growth potential in other regions. Consider reallocating a portion of the investments to increase exposure to international markets.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard FTSE All-World ex-US Index Fund ETF Shares
    JPMorgan Equity Premium Income ETF
    Invesco QQQ Trust
    iShares Core Growth Allocation ETF
    Schwab U.S. Dividend Equity ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    Vanguard Small-Cap Index Fund ETF Shares
    Amplify CWP Enhanced Dividend Income ETF
    Vanguard S&P 500 Growth Index Fund ETF Shares
    Schwab U.S. Broad Market ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    iShares Core Dividend Growth ETF
    High correlation

The portfolio contains several highly correlated assets, such as the Vanguard S&P 500 ETF and the Invesco QQQ Trust. These assets tend to move in tandem, reducing the diversification benefits. While correlation can enhance returns during market upswings, it also amplifies losses during downturns. To optimize the portfolio, consider reducing the number of overlapping assets, thereby enhancing diversification and potentially lowering risk. This adjustment could improve overall portfolio resilience against market volatility.

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.

Before optimizing, focus on reducing highly correlated assets to enhance diversification. Moving along the efficient frontier can help achieve a riskier or more conservative portfolio. A riskier portfolio may involve increasing equity exposure, while a more conservative one might include adding bonds or other stable assets. This strategy allows for tailoring the portfolio to better fit individual risk preferences and financial goals. Consider these adjustments to improve the portfolio's efficiency and align it with desired outcomes.

Dividends Info

  • iShares Core U.S. Aggregate Bond ETF 3.90%
  • iShares Core Growth Allocation ETF 2.40%
  • ProShares Bitcoin Strategy ETF 50.00%
  • iShares Core Dividend Growth ETF 2.10%
  • Amplify CWP Enhanced Dividend Income ETF 4.30%
  • iShares Global Clean Energy ETF 1.80%
  • JPMorgan Equity Premium Income ETF 7.00%
  • JPMorgan Nasdaq Equity Premium Income ETF 9.30%
  • Invesco QQQ Trust 0.60%
  • Schwab U.S. Broad Market ETF 1.20%
  • Schwab U.S. Dividend Equity ETF 3.30%
  • Vanguard Small-Cap Index Fund ETF Shares 1.30%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares 3.00%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 4.72%

The portfolio's dividend yield stands at 4.72%, indicating a reasonable income generation potential. High-yielding assets like the JPMorgan Equity Premium Income ETF and the ProShares Bitcoin Strategy ETF contribute significantly to this yield. While dividends provide a steady income stream, it's essential to balance yield with growth potential and risk. Consider maintaining a mix of high-yield and growth-oriented investments to ensure a balanced approach that aligns with long-term financial goals and risk tolerance.

Ongoing product costs Info

  • iShares Core U.S. Aggregate Bond ETF 0.03%
  • iShares Core Growth Allocation ETF 0.15%
  • ARK Innovation ETF 0.75%
  • ProShares Bitcoin Strategy ETF 0.95%
  • iShares Core Dividend Growth ETF 0.08%
  • Amplify CWP Enhanced Dividend Income ETF 0.56%
  • iShares Global Clean Energy ETF 0.41%
  • JPMorgan Equity Premium Income ETF 0.35%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Invesco QQQ Trust 0.20%
  • Schwab U.S. Broad Market ETF 0.03%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Small-Cap Index Fund ETF Shares 0.05%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.21%

The portfolio's total expense ratio (TER) is 0.21%, which is relatively low and helps maximize net returns. The costs vary across the different ETFs, with some like the ARK Innovation ETF and ProShares Bitcoin Strategy ETF having higher expense ratios. Keeping costs low is crucial for long-term investment success, as high fees can erode returns over time. Regularly reviewing and potentially replacing high-cost funds with more cost-effective alternatives could enhance overall performance without sacrificing diversification.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey