A growth-focused portfolio with high tech exposure and low geographic diversification

Report created on Jul 28, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards equities, with 99.8% invested in stocks and a minimal cash position. The asset allocation is dominated by the Vanguard Total Stock Market Index Fund ETF Shares at 70%, followed by the Invesco NASDAQ 100 ETF at 23%, and the Invesco PHLX Semiconductor ETF at 7%. Compared to common benchmarks, this portfolio is concentrated and lacks diversification across asset classes. Diversifying into bonds or alternative investments could reduce risk and enhance stability, especially during market downturns.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 12.57%, indicating robust growth over time. However, it also experienced a significant maximum drawdown of -29.24%, reflecting high volatility. This performance suggests a growth-oriented strategy that can yield substantial returns but also poses considerable risk. Comparing this to market benchmarks, the portfolio's performance aligns well with aggressive growth strategies. To manage risk, consider incorporating more defensive assets or rebalancing periodically to mitigate potential losses during downturns.

Projection Info

Monte Carlo simulations, using historical data, project a wide range of potential outcomes for this portfolio. With 1,000 simulations, the annualized return is estimated at 16.72%. The 5th percentile projects a modest 17.35% return, while the 67th percentile suggests a potential 785.22% return. These projections highlight both the high growth potential and the inherent risks. While Monte Carlo analysis provides useful insights, remember that it relies on past data and assumptions, and actual future performance may deviate. Regularly reviewing and adjusting allocations can help align the portfolio with evolving market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily concentrated in equities, with 99.8% in stocks and a negligible cash holding. This lack of diversification across asset classes increases risk, as it is highly susceptible to stock market fluctuations. Compared to diversified benchmarks, this allocation is aggressive and suited to investors seeking high growth. To enhance diversification and potentially reduce volatility, consider adding fixed income or alternative investments. This could provide a buffer during market downturns and contribute to more stable, long-term returns.

Sectors Info

  • Technology
    40%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Financials
    10%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The portfolio is heavily weighted towards the technology sector, comprising 40.24% of the holdings. Other sectors like consumer cyclicals, communication services, and financial services are also represented but to a lesser extent. This concentration in technology aligns with growth strategies but can lead to higher volatility, especially during periods of market uncertainty or rising interest rates. To mitigate sector-specific risks, consider diversifying into underrepresented sectors such as utilities or real estate, which can offer more stable returns.

Regions Info

  • North America
    98%
  • Europe Developed
    1%

Geographically, the portfolio is overwhelmingly focused on North America, accounting for 98.24% of the holdings. This limited geographic diversification exposes the portfolio to regional risks and may miss out on growth opportunities in other markets. Compared to global benchmarks, this allocation is heavily skewed. To improve diversification and reduce potential regional risk, consider increasing exposure to international markets, particularly in Europe and Asia, which may offer growth potential and diversification benefits.

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 current portfolio composition could be optimized further using the Efficient Frontier, a concept that aims to achieve the best possible risk-return ratio. By adjusting the weights of existing assets, the portfolio could potentially enhance returns without significantly increasing risk. This optimization focuses on maximizing efficiency based on the current asset mix. While the portfolio's growth focus is clear, exploring alternative allocations that offer a better balance between risk and return could lead to more consistent performance over time.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Invesco PHLX Semiconductor ETF 0.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.10%

The portfolio has a moderate dividend yield of 1.1%, with contributions from the Vanguard Total Stock Market Index Fund ETF Shares, Invesco NASDAQ 100 ETF, and Invesco PHLX Semiconductor ETF. While dividends provide a steady income stream, the focus on growth stocks means the yield is relatively low. For investors seeking income, increasing exposure to dividend-focused assets could enhance cash flow. However, given the growth focus, maintaining a balance between growth and income is crucial to meet long-term objectives.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Invesco PHLX Semiconductor ETF 0.19%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.07%

The portfolio benefits from a low total expense ratio (TER) of 0.07%, which is advantageous for long-term growth. Low costs mean more of your returns are retained, enhancing compounding over time. This aligns well with best practices for cost-efficient investing. However, periodically reviewing expense ratios and exploring lower-cost alternatives, such as index funds or ETFs, can further optimize costs and improve net returns, ensuring that the portfolio remains cost-effective.

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