A growth-focused portfolio with high exposure to US equities and technology sector concentration

Report created on Dec 13, 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 the Vanguard S&P 500 UCITS Acc ETF, which makes up 80% of the total allocation. Additionally, 15% is invested in the iShares S&P 500 USD Information Technology Sector UCITS, and the remaining 5% is in the Vanguard FTSE All-World UCITS ETF USD Accumulation. The portfolio is predominantly composed of equity assets, with a minuscule allocation in cash and other categories. This structure suggests a strong focus on growth through exposure to the US stock market. However, the concentration in a single asset class and limited diversification across different regions and sectors could expose the portfolio to higher risks, particularly market-specific downturns.

Growth Info

Historically, this portfolio has shown impressive performance with a compound annual growth rate (CAGR) of 17.31%. If you had invested a hypothetical sum, the growth would have been substantial over time. However, it's essential to note that the portfolio also experienced a significant maximum drawdown of -25.11%. This indicates periods of volatility that could impact returns during market downturns. While past performance can provide insights, it doesn't guarantee future results. Understanding these trends can help set realistic expectations and prepare for potential market fluctuations.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected based on historical data. This analysis provides a range of potential outcomes, with the 5th percentile at 170.32% and the 67th percentile at 1,225.58% by the end of the simulation period. The annualized return across all simulations is estimated at 19.0%. While these projections offer a glimpse into possible futures, they rely on historical data and assumptions that may not hold in changing market conditions. It's crucial to consider these limitations when making long-term investment decisions.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is overwhelmingly in stocks, accounting for nearly 100% of the total. This concentration in a single asset class suggests a strong growth orientation but also increases exposure to stock market volatility. Diversification across different asset classes, such as bonds or real estate, could potentially reduce risk and provide more stability in uncertain market conditions. Exploring opportunities to include other asset classes might enhance the risk-return profile of the portfolio, aligning it with long-term investment goals.

Sectors Info

  • Technology
    43%
  • Financials
    11%
  • Health Care
    9%
  • Consumer Discretionary
    9%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The portfolio exhibits a notable concentration in the technology sector, which comprises approximately 42.67% of the total allocation. Other sectors like financial services, healthcare, and consumer cyclicals have significantly lower allocations. While the technology sector has historically driven strong returns, this concentration could expose the portfolio to sector-specific risks, especially during downturns. Balancing the sectoral allocation by increasing exposure to underrepresented sectors could enhance diversification and reduce potential volatility, aligning with a more balanced growth strategy.

Regions Info

  • North America
    98%
  • Europe Developed
    1%

Geographically, the portfolio is heavily skewed towards North America, particularly the US, with 97.66% of the allocation. This strong regional focus could pose risks if the US market experiences downturns. Limited exposure to other regions like Europe, Asia, and emerging markets restricts potential benefits from global diversification. Increasing geographic diversification by reallocating a portion of the portfolio to international markets could mitigate region-specific risks and tap into growth opportunities worldwide, enhancing the portfolio's stability and 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 can be optimized using the Efficient Frontier, which suggests the best possible risk-return ratio based on current assets. By adjusting the allocation between existing ETFs, it may be possible to achieve a more favorable balance of risk and return. This process doesn't necessarily mean adding new assets but rather reallocating within the current selection to enhance efficiency. However, optimization is based on historical data, which may not fully predict future market conditions. Regular reviews and adjustments are recommended to maintain optimal performance.

Ongoing product costs Info

  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is relatively low at 0.09%, indicating cost-efficient management. Lower costs can significantly enhance long-term returns, as they reduce the drag on performance. However, it's important to remain vigilant about any potential increases in fees or hidden costs that could erode returns over time. Regularly reviewing and comparing the expense ratios of current holdings with alternative options can help ensure the portfolio remains cost-effective, maximizing net returns and supporting long-term investment objectives.

What next?

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