A tech-focused growth portfolio with strong historical returns but limited geographic diversification

Report created on Feb 5, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards U.S. equities, with a significant 60% allocation to the Vanguard S&P 500 ETF. The remaining 40% is split between the Invesco NASDAQ 100 ETF and the VanEck Semiconductor ETF, each at 20%. This composition leans heavily on large-cap, technology-driven stocks, which aligns with the growth profile but may lack diversification in terms of asset classes, as it is entirely composed of equities. Balancing this with other asset classes like bonds or real estate could mitigate risk, especially during market downturns.

Growth Info

Historically, this portfolio has delivered impressive returns with a CAGR of 18.28%. However, it also experienced a significant maximum drawdown of -31.22%, highlighting its volatility. Compared to benchmarks, this performance is strong, reflecting the tech sector's robust growth over recent years. Investors should note that while past performance is an indicator of potential, it doesn't guarantee future results. To manage volatility, consider diversifying into more stable sectors or adding defensive assets.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, predicts a wide range of outcomes, with the 50th percentile showing a 1,055.6% increase. This method uses historical data to simulate future returns, giving a probabilistic view of potential outcomes. While the projections are optimistic, it's crucial to remember that they are based on past data and market conditions can change. Regularly reviewing the portfolio's allocation can help ensure it remains aligned with personal risk tolerance and market trends.

Asset classes Info

  • Stocks
    100%

With 100% allocation to stocks, this portfolio is highly exposed to equity market fluctuations. While this can drive growth, it also increases risk, especially during market downturns. Diversifying across different asset classes, such as bonds or commodities, can provide a buffer against volatility and help stabilize returns. This approach can enhance overall portfolio resilience and align with long-term growth strategies.

Sectors Info

  • Technology
    50%
  • Consumer Discretionary
    9%
  • Telecommunications
    8%
  • Financials
    8%
  • Health Care
    7%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

The portfolio is heavily concentrated in the technology sector, comprising 50% of total assets. While this has driven past performance, it also exposes the portfolio to sector-specific risks, such as regulatory changes or tech market corrections. A balanced sector allocation could reduce volatility and provide more consistent returns. Consider increasing exposure to underrepresented sectors like healthcare or industrials for greater balance.

Regions Info

  • North America
    95%
  • Asia Developed
    3%
  • Europe Developed
    2%

Geographically, the portfolio is predominantly invested in North America, with 95% exposure. This concentration limits international diversification, potentially increasing vulnerability to U.S. market-specific risks. Diversifying into other regions, such as emerging markets or developed Europe, could enhance growth opportunities and reduce reliance on a single economic area. A more global approach can provide a hedge against regional downturns.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    38%
  • Mid-cap
    14%

The portfolio is primarily invested in mega and big-cap stocks, with 48% and 38% allocations, respectively. This focus on large, established companies can provide stability but might miss out on the growth potential of smaller-cap stocks. Including medium or small-cap stocks could increase diversification and capture higher growth opportunities. This adjustment could enhance the portfolio's risk-return profile over time.

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 concept, which seeks the best possible risk-return ratio. By adjusting the weights of existing assets, the portfolio can potentially achieve higher returns for the same level of risk or lower risk for the same return. This process involves considering the correlation between assets and their individual risk and return profiles to find the most efficient allocation.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.92%

The portfolio's dividend yield stands at 0.92%, with the Vanguard S&P 500 ETF contributing the most at 1.20%. While dividends provide a steady income stream, this yield is relatively low, reflecting the growth focus. For investors seeking income, increasing the allocation to dividend-paying stocks or funds might be beneficial. However, maintaining a balance between growth and income is crucial to achieving long-term financial goals.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.12%

The total expense ratio (TER) of the portfolio is 0.12%, which is commendably low. This cost efficiency supports better long-term returns, as lower fees mean more money stays invested. Keeping an eye on expense ratios and opting for low-cost funds can significantly impact overall portfolio performance. This aspect is well-aligned with best practices, ensuring that costs do not erode returns.

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