A tech-focused portfolio with high growth potential but limited geographic diversification

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with a balanced risk tolerance seeking high growth potential through a tech-heavy equity focus. Ideal for those with a long-term horizon, it emphasizes capital appreciation over income generation. The portfolio's concentrated geographic and sector exposure may appeal to investors confident in North American tech growth but willing to accept higher volatility for potentially higher returns. Diversification opportunities exist for those seeking a broader market exposure.

Positions

  • iShares Core S&P 500 UCITS ETF USD (Acc)
    CSPX - IE00B5BMR087
    50.00%
  • iShares NASDAQ 100 UCITS ETF USD (Acc)
    CNX1 - IE00B53SZB19
    40.00%
  • VanEck Semiconductor UCITS ETF
    SMGB - IE00BMC38736
    10.00%

The portfolio is heavily concentrated in equities, with 100% allocation to stocks. This focus on equities aligns with a growth-oriented strategy, but it lacks diversification across asset classes like bonds or cash, which could help mitigate risk. Compared to a balanced benchmark, this portfolio is skewed towards equities, increasing potential returns but also volatility. To enhance stability, consider adding fixed income or alternative assets, which can provide a buffer during market downturns.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 12.76%, indicating strong growth. This performance is impressive, especially when compared to typical equity benchmarks, but it's important to note the portfolio's maximum drawdown of -16.20%. This suggests that while returns are high, the portfolio can experience significant volatility. To manage this risk, consider strategies like rebalancing or diversifying into less correlated assets to smooth out potential downturns.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, estimates an annualized return of 12.68% with a high probability of positive returns. However, it's essential to remember that these projections are based on past performance and don't guarantee future results. The simulation suggests a wide range of potential outcomes, emphasizing the need for a diversified approach to manage uncertainty. Regularly reviewing and adjusting the portfolio can help align it with evolving market conditions.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio is solely invested in stocks, with no exposure to other asset classes. This lack of diversification can increase risk, as equities tend to be more volatile than bonds or real estate. A more balanced allocation could provide stability and reduce overall risk. Consider introducing bonds or other asset classes to create a more diversified and resilient portfolio, which can help cushion against market fluctuations and provide a steadier return profile.

Sectors Info

  • Technology
    46%
  • Telecommunications
    11%
  • Consumer Discretionary
    11%
  • Health Care
    8%
  • Financials
    7%
  • Consumer Staples
    5%
  • Industrials
    5%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

The portfolio is heavily weighted towards the technology sector, comprising 46% of the total allocation. While this concentration has driven strong past performance, it also increases susceptibility to sector-specific risks, such as regulatory changes or tech market volatility. Balancing the sector allocation by increasing exposure to underrepresented areas like healthcare or consumer staples could mitigate these risks and provide a more stable performance across different market cycles.

Regions Info

  • North America
    96%
  • Europe Developed
    2%
  • Asia Developed
    1%
  • Latin America
    0%
  • Asia Emerging
    0%

Geographically, the portfolio is predominantly focused on North America, with 96% allocation. This concentration limits exposure to international markets, potentially missing out on growth opportunities in regions like Asia or Europe. Diversifying geographically can reduce risk and enhance returns by capturing growth in various economies. Consider increasing exposure to emerging markets or developed regions outside North America to achieve a more balanced global allocation and reduce reliance on a single economic region.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    37%
  • Mid-cap
    15%
  • Small-cap
    0%

The portfolio is primarily invested in large-cap stocks, with 85% in mega and big companies. This focus provides stability and lower volatility compared to smaller companies, but it may limit growth potential. Including mid-cap or small-cap stocks could enhance diversification and capture higher growth opportunities. A balanced approach across different market capitalizations can offer a mix of stability and growth, improving the overall risk-return profile of the portfolio.

Ongoing product costs Info

  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • iShares Core S&P 500 UCITS ETF USD (Acc) 0.12%
  • VanEck Semiconductor UCITS ETF 0.35%
  • Weighted costs total (per year) 0.24%

The total expense ratio (TER) of 0.24% is relatively low, supporting better long-term returns by minimizing costs. This efficient cost structure aligns with best practices for maintaining a cost-effective investment strategy. Keeping expenses low is crucial, as high costs can erode returns over time. Continue to monitor and manage expenses, ensuring they remain competitive and aligned with the portfolio's objectives to support optimal performance.

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.

The portfolio could be optimized for a better risk-return ratio using the Efficient Frontier, which suggests a potential return of 15.72%. This optimization involves reallocating existing assets to achieve the best possible risk-return balance without increasing overall risk. Consider reviewing the current allocation and making adjustments to enhance efficiency, focusing on achieving the highest return for the given level of risk, while maintaining alignment with investment goals.

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