Growth-focused portfolio with a strong tilt towards technology and limited geographic diversity

Report created on Jan 9, 2025

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 heavily invested in U.S. equities, with a significant concentration in growth-oriented ETFs and funds. The Schwab U.S. Large-Cap Growth ETF and Fidelity 500 Index Fund collectively make up over half of the portfolio. This composition is typical for growth-focused portfolios, aiming for capital appreciation. However, the low diversification score suggests a need for greater variety in asset types to mitigate risk. Consider incorporating different asset classes like bonds or international equities to balance growth with stability, aligning with more diversified benchmark compositions.

Growth Info

Historically, the portfolio has performed impressively with a CAGR of 20.64%, indicating strong growth over time. However, it has experienced significant volatility, as seen in the max drawdown of -35.14%. This level of fluctuation is common in growth-oriented portfolios, where higher returns often come with increased risk. Comparing this to a standard benchmark, the portfolio has outperformed, but with higher volatility. To manage risk, consider strategies to reduce drawdowns, such as diversifying into less volatile asset classes or sectors.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential returns, with a median (50th percentile) projection of 1,403.27% growth. While these simulations provide a broad view of potential outcomes, they rely on past data and can't predict future market conditions. Given the high projected returns, the portfolio is positioned for growth but may face significant fluctuations. To improve predictability, consider adjusting the asset mix for more stability, especially if nearing a financial goal.

Asset classes Info

  • Stocks
    100%

The portfolio is almost entirely composed of stocks, with a negligible cash position. This heavy stock allocation aligns with a growth strategy, offering potential for high returns. However, it also increases exposure to market volatility. In comparison, diversified benchmarks typically include a mix of asset classes like bonds to stabilize returns. To enhance diversification, consider incorporating fixed-income assets or other non-correlated investments, which can help cushion the portfolio during equity market downturns.

Sectors Info

  • Technology
    39%
  • Financials
    14%
  • Industrials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    4%
  • Consumer Discretionary
    3%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

The portfolio is heavily weighted towards technology, accounting for nearly 40% of the allocation. This concentration can drive significant growth during tech booms but may also lead to higher volatility during downturns or regulatory changes. Compared to broader market benchmarks, this sector allocation is more concentrated. To reduce risk, consider diversifying across more sectors, potentially increasing allocation to traditionally stable sectors like healthcare or consumer staples, which can provide balance during economic shifts.

Regions Info

  • North America
    98%
  • Europe Developed
    1%
  • Asien
    1%

Geographically, the portfolio is predominantly invested in North America, with over 98% exposure. This lack of international diversification may limit growth opportunities and increase vulnerability to U.S. market-specific risks. Compared to global benchmarks, which often include a more balanced geographic spread, this portfolio could benefit from increasing exposure to international markets. Consider adding investments in emerging markets or developed regions outside North America to capture broader economic growth and enhance diversification.

Redundant positions Info

  • Fidelity® MSCI Information Technology Index ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

Assets in the portfolio, particularly the Fidelity® MSCI Information Technology Index ETF and Schwab U.S. Large-Cap Growth ETF, are highly correlated. This means they tend to move together, which can reduce the diversification benefits and increase risk during market downturns. A well-diversified portfolio typically includes assets with low correlation to each other. To improve diversification, consider replacing highly correlated assets with those that have historically moved independently, potentially reducing overall portfolio risk.

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 could potentially be optimized using the Efficient Frontier, which seeks the best risk-return ratio given the current assets. However, the presence of highly correlated assets suggests a need for initial adjustments. Removing or replacing these overlapping investments can enhance diversification and potentially improve the portfolio's efficiency. Once diversified, explore optimization strategies to achieve a balance that maximizes returns for the given level of risk, aligning with long-term growth goals.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • Fidelity 500 Index Fund 1.20%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • VanEck Semiconductor ETF 0.40%
  • Invesco S&P MidCap Momentum ETF 0.20%
  • Weighted yield (per year) 0.75%

The portfolio's dividend yield is relatively low at 0.75%, reflecting its focus on growth rather than income. Growth stocks and ETFs often reinvest earnings to fuel expansion rather than pay out dividends. For investors seeking income, this yield might not be sufficient. However, for those prioritizing capital appreciation, this aligns well with growth objectives. If income generation becomes a priority, consider adding higher-yielding assets, such as dividend-focused funds or bonds, to balance growth with regular income.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • Fidelity 500 Index Fund 0.02%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • VanEck Semiconductor ETF 0.35%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is relatively low and favorable for long-term performance. Lower costs mean more of your investment returns stay in your pocket. This cost efficiency is a positive aspect, aligning well with best practices for minimizing investment expenses. To maintain this advantage, regularly review fund fees and consider replacing higher-cost assets with lower-cost alternatives, ensuring that the portfolio remains cost-effective as it evolves.

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