A high-risk growth-focused portfolio with significant tech exposure and moderate diversification

Report created on Dec 28, 2024

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily skewed towards equities, with over 98% in stocks. The largest position is in the Schwab U.S. Large-Cap Growth ETF, accounting for 30.31% of the portfolio. Such concentration in a single ETF aligns with growth-focused strategies but can limit diversification. Compared to standard balanced portfolios, this one is more aggressive, as it lacks bonds and other fixed-income assets. While the portfolio's aggressive nature may suit certain investors, adding more asset classes could enhance stability and reduce risk during market downturns.

Growth Info

Historically, the portfolio has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 41.67%. However, it has also experienced significant volatility, as indicated by a maximum drawdown of -52.84%. This suggests that while the portfolio can deliver high returns, it is also susceptible to substantial losses. Comparing this to a benchmark like the S&P 500, which typically has lower drawdowns, highlights the portfolio's aggressive risk profile. Investors should be aware that past performance, although impressive, does not guarantee future results.

Projection Info

Using Monte Carlo simulations, future performance projections show a wide range of outcomes. The median simulation predicts a 150.97% increase, but the 5th percentile suggests potential losses as high as -98.61%. This reflects the inherent uncertainty in projecting future returns based on historical data. While the simulations provide a useful range of potential outcomes, they should be interpreted with caution. Investors might consider balancing the portfolio to reduce extreme downside risks while maintaining growth potential.

Asset classes Info

  • Stocks
    99%
  • No data
    1%

The portfolio's allocation is predominantly in stocks, with a negligible portion in cash and other assets. This heavy equity weighting suggests a strong growth orientation, but it also increases vulnerability to market volatility. Compared to diversified portfolios that include bonds or real estate, this allocation may result in higher short-term fluctuations. To enhance diversification, consider incorporating other asset classes that may offer stability and income, such as fixed-income securities or real estate investment trusts.

Sectors Info

  • Technology
    50%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Consumer Staples
    9%
  • Telecommunications
    5%
  • Health Care
    4%
  • Industrials
    4%
  • Energy
    2%
  • Basic Materials
    2%
  • No data
    1%

Technology dominates the sector allocation, making up nearly 50% of the portfolio. While tech stocks can drive significant growth, they also tend to be more volatile, especially during economic shifts like interest rate changes. Other sectors, such as financial services and consumer cyclicals, provide some balance but are less prominent. This concentration in tech may lead to increased risk during sector downturns. Diversifying into underrepresented sectors could mitigate this risk and improve overall portfolio stability.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    1%
  • No data
    1%
  • Asia Developed
    1%

The portfolio is heavily concentrated in North America, with 90.27% of assets allocated there. This geographic bias can limit exposure to growth opportunities in other regions and increase vulnerability to local economic downturns. Compared to global benchmarks, this allocation is less diversified. To enhance geographic diversification, consider increasing exposure to emerging markets and developed regions outside North America, which may offer growth potential and risk diversification.

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 current allocation could be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio. This involves adjusting the weights of existing assets to enhance returns for a given level of risk. While the portfolio is already aggressive, exploring optimization could further improve performance without adding new assets. Investors should be aware that optimization focuses on current holdings and may not address broader diversification needs, but it can still enhance efficiency.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • American Express Company 0.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Fidelity® Government Money Market Fund 4.90%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 0.65%

The portfolio's dividend yield is relatively low at 0.65%, reflecting its growth focus. While dividends can provide steady income, this portfolio prioritizes capital appreciation over income generation. Investors seeking income might consider increasing allocations to dividend-paying stocks or funds. However, for those focused on growth, maintaining a lower dividend yield is consistent with the strategy. Balancing dividend and growth stocks could offer a more stable return profile while still capturing growth opportunities.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.04%. This is beneficial for long-term performance, as lower costs mean more of the portfolio's returns are retained. Compared to industry averages, these costs are quite competitive, supporting the portfolio's growth objectives. While cost reduction is a positive aspect, investors should ensure that low costs do not compromise the quality or diversification of their holdings. Regular reviews can help maintain cost efficiency and investment quality.

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