High Growth Portfolio with Strong Technology Focus and Broad Diversification for Risk-Tolerant Investors

Report created on Dec 3, 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 is composed of four ETFs, with a significant allocation of 48% to the VanEck Semiconductor ETF, indicating a strong emphasis on the technology sector. The remaining allocation is spread across Global X MLP & Energy Infrastructure ETF (20%), Vanguard Total International Stock Index Fund ETF Shares (20%), and JPMorgan Equity Premium Income ETF (12%). This mix suggests a growth-oriented approach, with a focus on technology and energy sectors. Diversification is achieved through international exposure and various sectors, but the heavy weighting in technology may increase volatility.

Growth Info

Historically, the portfolio has performed impressively with a compound annual growth rate (CAGR) of 26.47%, reflecting its growth-oriented nature. However, it also experienced a maximum drawdown of -29.91%, indicating potential volatility. The portfolio's performance is concentrated, with 90% of returns achieved in just 31 days. This suggests that while the portfolio can deliver substantial gains, it may also be subject to significant short-term fluctuations. Investors should be prepared for these swings and have a long-term perspective to ride out the volatility.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio shows a promising forward projection. Assuming a hypothetical initial investment, the simulation indicates a 5th percentile return of 321.15%, a median (50th percentile) return of 1,528.64%, and a 67th percentile return of 2,352.84%. All simulations resulted in positive returns, with an annualized return of 24.66%. This suggests a high likelihood of achieving substantial growth, but investors should be aware of the inherent risks and potential for variability in outcomes.

Asset classes Info

  • Stocks
    98%
  • No data
    2%

The portfolio is predominantly invested in stocks, with 97.99% allocated to this asset class. This high concentration in equities aligns with the growth focus, offering potential for significant capital appreciation. However, it also exposes the portfolio to market volatility. The presence of a small cash component (0.36%) provides limited liquidity, while the "NotClassified" and "Other" categories make up a negligible portion. To manage risk, consider diversifying into other asset classes like bonds, which can provide stability and income.

Sectors Info

  • Technology
    53%
  • Energy
    21%
  • Financials
    6%
  • Industrials
    5%
  • Health Care
    4%
  • Consumer Discretionary
    3%
  • Consumer Staples
    3%
  • Basic Materials
    2%
  • Telecommunications
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation is heavily skewed towards technology, which comprises 53.03% of the portfolio. This concentration reflects a strong bet on the tech industry's continued growth but also increases susceptibility to sector-specific risks. Energy is the second-largest sector at 21.25%, providing some diversification. The remaining sectors have minor allocations, suggesting limited exposure to other areas of the economy. To achieve a more balanced risk profile, consider diversifying into underrepresented sectors, which can help cushion against downturns in tech or energy.

Regions Info

  • North America
    72%
  • Europe Developed
    11%
  • Asia Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is primarily focused on North America, accounting for 71.81% of the assets. This reflects a home bias typical of U.S.-based investors but may limit exposure to growth opportunities in other regions. Europe Developed and Asia Developed follow, with smaller allocations, while emerging markets have minimal representation. To enhance diversification, consider increasing exposure to emerging markets and other underrepresented regions, which can offer growth potential and reduce reliance on North American 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 optimization chart suggests potential for improvement by adjusting the risk-return trade-off along the efficient frontier. Investors can achieve a riskier or more conservative portfolio by reallocating assets within the same risk tolerance level. For those seeking higher returns, increasing exposure to high-growth sectors or reducing cash holdings might be beneficial. Conversely, more conservative investors could consider adding bonds or diversifying into less volatile sectors. Optimizing the portfolio involves balancing risk and return in alignment with personal financial goals and risk appetite.

Dividends Info

  • JPMorgan Equity Premium Income ETF 6.40%
  • Global X MLP & Energy Infrastructure ETF 4.10%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.38%

The portfolio's dividend yield stands at 2.38%, with the JPMorgan Equity Premium Income ETF contributing the highest yield at 6.4%. The Global X MLP & Energy Infrastructure ETF also offers a notable yield of 4.1%, providing a steady income stream. The VanEck Semiconductor ETF and Vanguard Total International Stock Index Fund ETF Shares contribute lower yields, reflecting their growth focus. While dividends provide a source of income, the portfolio's primary objective appears to be capital appreciation. Consider balancing growth and income needs based on personal financial goals.

Ongoing product costs Info

  • JPMorgan Equity Premium Income ETF 0.35%
  • Global X MLP & Energy Infrastructure ETF 0.45%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.32%

The portfolio's total expense ratio (TER) is 0.32%, which is relatively low and helps keep investment costs manageable. The Vanguard Total International Stock Index Fund ETF Shares offers the lowest cost at 0.08%, while the Global X MLP & Energy Infrastructure ETF has the highest at 0.45%. Keeping costs low is crucial for maximizing net returns over time. To further reduce expenses, regularly review the expense ratios of the underlying funds and consider replacing high-cost funds with more cost-effective alternatives without compromising on diversification or performance.

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