High-Risk Low-Diversity Growth Portfolio with Strong Tech Focus and Impressive Historical Performance

Report created on Dec 4, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is dominated by four main positions, with a significant allocation to the Vanguard S&P 500 ETF at 56.44%. This is followed by the Invesco NASDAQ 100 ETF at 18.02%, NVIDIA Corporation at 16.64%, and the Schwab U.S. Dividend Equity ETF at 8.90%. The heavy concentration in a few positions suggests a low diversification strategy, which can lead to higher volatility. It's crucial to consider rebalancing to include a wider range of assets to mitigate risks associated with market fluctuations and enhance stability over time.

Growth Info

Historically, the portfolio has shown a remarkable performance with a compound annual growth rate (CAGR) of 24.82%. However, it also experienced a maximum drawdown of -34.51%, indicating significant risk during market downturns. The high returns are largely attributed to the strong performance of the technology sector, but the volatility should be noted. To maintain such returns while reducing risk, consider diversifying the portfolio to include more defensive assets, which can help cushion against future market corrections.

Projection Info

Using a Monte Carlo simulation with 1,000 scenarios, the portfolio shows an impressive potential for growth. Assuming a hypothetical initial investment, the 5th percentile indicates a 437.61% return, while the median shows 3,100.4%, and the 67th percentile projects 5,110.32%. With 998 out of 1,000 simulations yielding positive returns, the outlook is optimistic. However, it's important to remember that these are projections and not guarantees. To increase the likelihood of achieving these results, consider a strategy that balances growth with risk management.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising 99.94% of the total allocation. This concentration in a single asset class can lead to increased exposure to market volatility. While stocks offer the potential for high returns, they also come with significant risk. To reduce this risk, consider incorporating other asset classes such as bonds or real estate, which can provide stability and diversification. A more balanced asset allocation can help protect the portfolio during market downturns.

Sectors Info

  • Technology
    45%
  • Consumer Discretionary
    9%
  • Financials
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    1%
  • Real Estate
    1%

The portfolio has a strong focus on the technology sector, making up 45.43% of the allocation. Other sectors include consumer cyclicals, financial services, and healthcare. While the tech sector has driven impressive returns, this concentration increases vulnerability to sector-specific risks. To mitigate this, consider diversifying across more sectors, such as utilities or consumer defensive, which can offer stability and reduce reliance on the performance of a single sector. A broader sector allocation can enhance resilience against market fluctuations.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographically, the portfolio is concentrated in North America, accounting for 99.17% of the allocation. This regional focus exposes the portfolio to risks associated with economic and political changes in the US. To hedge against these risks, consider diversifying into other regions, such as Europe or Asia, which can provide exposure to different economic cycles and growth opportunities. A more geographically diversified portfolio can help balance potential downturns in one region with growth in another.

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 optimization analysis suggests that there's room for improvement in terms of diversification and risk management. By moving along the efficient frontier, one can achieve a riskier or more conservative portfolio. To optimize, consider incorporating a mix of asset classes and sectors that align with your risk tolerance and financial goals. This approach will allow for a more balanced risk-return profile and potentially enhance long-term performance. Focus on strategic rebalancing to maintain alignment with your investment objectives.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.30%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.08%

The portfolio's dividend yield stands at 1.08%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield at 3.3%. While dividends provide a steady income stream, the overall yield is relatively low due to the focus on growth stocks. For investors seeking higher income, consider increasing exposure to dividend-paying stocks or funds. This can enhance income generation while maintaining growth potential. Balancing growth and income can lead to a more sustainable long-term investment strategy.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.05%. The Vanguard S&P 500 ETF has the lowest cost at 0.03%, contributing to the portfolio's cost-efficiency. Keeping costs low is crucial for maximizing returns, as high fees can erode gains over time. It's important to continue monitoring expenses and consider cost-effective investment options. Maintaining a focus on low-cost investments can enhance the portfolio's overall performance and help achieve financial goals more efficiently.

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