Balanced Growth Portfolio with Strong US Focus and Diverse Sector Allocation

Report created on Dec 2, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio consists of 11 different ETFs, with a heavy concentration in Vanguard S&P 500 ETF at 40%. Smaller allocations are spread across various sectors and industries, providing moderate diversification. The portfolio's focus on ETFs suggests a preference for passive management, which can be cost-effective. However, the concentration in a single ETF could expose the portfolio to risks associated with market fluctuations. Diversification is key to mitigating risk, so consider rebalancing to ensure a wider spread across different asset classes and sectors.

Growth Info

Historically, the portfolio has performed well, with a compound annual growth rate (CAGR) of 11.96%. This indicates a strong performance relative to market averages, though past performance is not indicative of future results. The maximum drawdown of -23.91% highlights the potential volatility, which is common in growth-oriented portfolios. It's essential to understand that returns are often concentrated in a few days, emphasizing the importance of staying invested. Consider maintaining a long-term perspective to ride out market fluctuations and capitalize on potential growth.

Projection Info

Using a Monte Carlo simulation, the portfolio's future performance was projected with 1,000 simulations. The median outcome suggests a potential growth of 173.4%, while the worst-case scenario predicts a -53.35% loss. The annualized return across simulations is 12.05%. Monte Carlo simulations offer insights into potential future outcomes, but they are not guarantees. This analysis underscores the importance of diversification and risk management. Regularly review the portfolio's performance against your goals to ensure alignment and make adjustments as needed.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.79% in equities and negligible allocations in cash and bonds. This allocation aligns with a growth-oriented strategy but can increase volatility. A lack of bonds means the portfolio might lack stability during market downturns. Consider introducing a small allocation to bonds or other fixed-income assets to provide a buffer against market volatility. This can help balance the portfolio and reduce overall risk while still allowing for growth potential.

Sectors Info

  • Technology
    23%
  • Financials
    16%
  • Industrials
    14%
  • Consumer Discretionary
    12%
  • Energy
    10%
  • Health Care
    8%
  • Basic Materials
    7%
  • Telecommunications
    4%
  • Consumer Staples
    4%
  • Real Estate
    1%
  • Utilities
    1%

The portfolio is diversified across multiple sectors, with a significant allocation to technology at 22.53%, followed by financial services and industrials. This sector allocation reflects a growth focus, capitalizing on sectors with high potential returns. However, heavy reliance on certain sectors can increase risk if those sectors underperform. Regularly review sector performance and consider rebalancing to ensure a balanced exposure. This approach can help mitigate risks associated with sector-specific downturns and enhance overall portfolio stability.

Regions Info

  • North America
    87%
  • Europe Developed
    5%
  • Japan
    3%
  • Asia Emerging
    2%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily skewed towards North America, accounting for 87.36% of the allocation. This concentration can expose the portfolio to regional risks, such as economic downturns or policy changes. While North America has historically been a strong performer, diversification across other regions can provide additional growth opportunities and risk mitigation. Consider gradually increasing exposure to international markets to achieve a more balanced geographic allocation and tap into global growth potential.

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 shows potential for optimization along the efficient frontier, where returns can be maximized for a given level of risk. To achieve a riskier portfolio, consider increasing allocations to high-growth sectors or reducing bond exposure. Conversely, for a more conservative approach, introduce more fixed-income assets or diversify further across less volatile sectors. Before optimizing, ensure the portfolio aligns with your risk appetite and financial goals. Focus on maintaining diversification and regularly review the portfolio to ensure it remains on the efficient frontier.

Dividends Info

  • First Trust RBA American Industrial RenaissanceTM ETF 0.20%
  • Avantis® International Small Cap Value ETF 3.10%
  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Fidelity® MSCI Information Technology Index ETF 0.60%
  • iShares Genomics Immunology and Healthcare ETF 1.10%
  • iShares Self-Driving EV and Tech ETF 2.50%
  • Defiance Quantum 0.70%
  • Invesco PHLX Semiconductor ETF 0.70%
  • Sprott Uranium Miners ETF 3.70%
  • Vanguard S&P 500 ETF 1.20%
  • SPDR® S&P Metals and Mining ETF 0.60%
  • Weighted yield (per year) 1.46%

The portfolio's overall dividend yield stands at 1.46%, with contributions from various ETFs. While dividends provide a steady income stream, the yield is relatively modest due to the growth focus. Growth-oriented portfolios often prioritize capital appreciation over income. If income generation is a priority, consider increasing allocations to higher-yielding assets. However, ensure that such changes align with the overall investment strategy and risk tolerance. Balancing growth and income can help achieve a well-rounded portfolio.

Ongoing product costs Info

  • First Trust RBA American Industrial RenaissanceTM ETF 0.70%
  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • iShares Genomics Immunology and Healthcare ETF 0.47%
  • iShares Self-Driving EV and Tech ETF 0.47%
  • Defiance Quantum 0.40%
  • Invesco PHLX Semiconductor ETF 0.19%
  • Sprott Uranium Miners ETF 0.75%
  • Vanguard S&P 500 ETF 0.03%
  • SPDR® S&P Metals and Mining ETF 0.35%
  • Weighted costs total (per year) 0.21%

The portfolio's total expense ratio (TER) is 0.21%, which is relatively low, indicating cost-effective management. Lower costs can significantly enhance long-term returns, especially in a growth-focused portfolio. While most ETFs in the portfolio have competitive expense ratios, some, like the Sprott Uranium Miners ETF at 0.75%, are higher. Regularly review the cost structure and consider replacing higher-cost funds with more cost-effective alternatives if they align with your investment strategy. Keeping costs low is crucial for maximizing net returns.

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