A growth-focused portfolio with high North American exposure and strong tech sector presence

Report created on Dec 24, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio consists of a single ETF and two individual stocks, with the ETF making up nearly half of the allocation. This setup leans heavily on equities, aligning with a growth-focused strategy. Such a composition can be advantageous for capturing market gains but may lack the diversification of multiple asset classes. To enhance resilience, consider introducing bonds or alternative investments, which can act as stabilizers during market fluctuations.

Growth Info

Historically, the portfolio has achieved a remarkable CAGR of 16.71%, significantly outperforming many benchmarks. However, the max drawdown of -42.22% indicates substantial volatility, which is typical for growth-oriented portfolios. While past performance provides some insights, it's crucial to remember that it doesn't guarantee future success. Regularly reviewing performance against personal goals and market conditions is wise.

Projection Info

Monte Carlo simulations offer a glimpse into potential future outcomes by analyzing numerous possible scenarios based on historical data. For this portfolio, the simulations suggest a positive outlook, with an annualized return of 18.52%. However, it's important to note that the 5th percentile projects a loss of -30.32%, highlighting the inherent risk. Diversifying further could mitigate potential downsides while maintaining growth potential.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly invested in stocks, with a negligible allocation in other asset classes. While this aligns with a growth strategy, it could increase susceptibility to equity market volatility. Diversifying across different asset classes, such as fixed income or real assets, can provide a buffer, reducing the impact of market downturns and contributing to more stable returns over time.

Sectors Info

  • Technology
    39%
  • Consumer Discretionary
    32%
  • Financials
    7%
  • Health Care
    5%
  • Industrials
    5%
  • Telecommunications
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

With a heavy concentration in technology and consumer cyclicals, the portfolio is poised to benefit from growth in these dynamic sectors. However, this also introduces sector-specific risks, such as heightened volatility during economic downturns. Balancing exposure by incorporating more defensive sectors could enhance stability and reduce risk, particularly during periods of economic uncertainty.

Regions Info

  • North America
    84%
  • Europe Developed
    7%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The portfolio's geographic allocation is heavily skewed towards North America, with limited exposure to other regions. While this may capture the growth potential of North American markets, it also increases vulnerability to regional economic shifts. Broadening geographic exposure can enhance diversification, providing a hedge against localized downturns and tapping into growth opportunities in emerging markets.

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 to achieve a higher expected return of 20.51%, though at a slightly increased risk level. This involves reallocating existing assets to find the best risk-return balance, known as the Efficient Frontier. Optimization can be complex, so it's advisable to consult with a financial advisor to tailor adjustments to your specific risk tolerance and objectives.

Ongoing product costs Info

  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.10%

The portfolio benefits from low costs, with the Vanguard ETF's TER at just 0.22%. Keeping costs low is crucial for maximizing long-term returns, as fees can erode gains over time. Regularly reviewing and optimizing costs by considering lower-cost alternatives can further enhance net returns, ensuring more of your investment works towards your financial goals.

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