This portfolio has only about 1.1 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.
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Cautious Portfolio with High Dividend Yield and Strong Performance Despite Limited Geographic Diversification

Report created on Jul 10, 2024

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio consists of a mix of ETFs and common stocks with a significant focus on U.S. large-cap growth and technology sectors. This composition indicates a preference for growth-oriented investments, with a cautious risk profile. The portfolio's asset allocation is predominantly in stocks, with a smaller allocation to bonds and minimal cash holdings. This setup suggests a strategy aimed at capital appreciation while maintaining some income through dividends. To optimize, consider balancing growth with stability by introducing more diverse asset classes, potentially increasing exposure to bonds or cash to reduce volatility.

Growth Info

Historically, the portfolio has demonstrated impressive performance, with a compound annual growth rate (CAGR) of 28.49%. This high return is accompanied by a relatively low maximum drawdown of 8.78%, indicating resilience during downturns. The portfolio's performance suggests effective stock selection and timing, contributing to substantial returns over time. However, past performance is not indicative of future results, so it's important to regularly review and adjust the portfolio to maintain its growth trajectory. Consider diversifying further to mitigate risks and sustain long-term performance.

Projection Info

A Monte Carlo simulation, which uses random sampling to predict future outcomes, shows promising potential for the portfolio. Assuming a hypothetical initial investment, the simulation indicates a median return of 5,216.98%, with all simulations yielding positive results. This suggests a high likelihood of continued success, but it's crucial to remain cautious of market fluctuations. The simulation highlights the importance of maintaining a balanced approach to risk and reward. To enhance future returns, consider rebalancing the portfolio periodically to align with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    85%
  • Bonds
    12%
  • No data
    3%
  • Cash
    1%

The portfolio's asset class distribution is heavily skewed towards stocks, comprising 84.58% of the total allocation. Bonds account for 11.84%, providing some stability, while cash is minimal at 0.59%. This allocation reflects a growth-oriented strategy but may expose the portfolio to higher volatility. A more balanced approach could involve increasing bond or cash allocations to cushion against market downturns. While the current allocation aligns with a cautious risk profile, diversifying across asset classes can enhance stability and potentially improve risk-adjusted returns over time.

Sectors Info

  • Technology
    32%
  • Financials
    16%
  • Energy
    14%
  • Telecommunications
    8%
  • Consumer Discretionary
    7%
  • Health Care
    5%
  • Industrials
    2%
  • Consumer Staples
    2%
  • Basic Materials
    1%
  • Utilities
    1%

Sector allocation reveals a strong emphasis on technology, making up 31.80% of the portfolio. Financial services and energy sectors also hold significant weight. This concentration in specific sectors suggests a strategy focused on capitalizing on growth opportunities in these areas. While this can lead to substantial gains, it also increases exposure to sector-specific risks. A more diversified sector allocation could help mitigate these risks and provide a smoother performance. Consider gradually reallocating investments to underrepresented sectors to achieve a more balanced and resilient portfolio.

Regions Info

  • North America
    87%

The portfolio's geographic allocation is predominantly focused on North America, with 87.34% of assets based in the region. This concentration indicates a strong reliance on the U.S. market, which may limit exposure to growth opportunities in other regions. While the U.S. market has historically performed well, diversifying geographically can help reduce risks associated with regional economic fluctuations. Consider exploring investments in developed and emerging markets outside North America to enhance diversification and potentially capture additional growth prospects.

Redundant positions Info

  • Vanguard Information Technology Index Fund ETF Shares
    JPMorgan Nasdaq Equity Premium Income ETF
    REX FANG & Innovation Equity Premium Income ETF
    Schwab U.S. Large-Cap Growth ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

There is a high correlation among several assets within the portfolio, particularly among ETFs focused on technology and growth sectors. This correlation suggests limited diversification benefits, as these assets tend to move in tandem. While this can amplify gains during market upswings, it also increases vulnerability during downturns. To improve diversification, consider reducing exposure to overlapping assets and exploring investments with lower correlations. This approach can help stabilize the portfolio and enhance risk-adjusted returns by spreading risk across a broader range of assets.

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.

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The portfolio could benefit from optimization by addressing the high correlation among certain assets. By removing overlapping investments that offer no diversification benefits, one can achieve a more efficient portfolio. Moving along the efficient frontier, investors can choose a riskier or more conservative portfolio. For a riskier approach, increase exposure to high-growth assets while maintaining some stability. Conversely, a more conservative portfolio would involve a higher allocation to bonds or cash. Focus on achieving a balance that aligns with financial goals and risk tolerance, optimizing for better returns.

Dividends Info

  • Ares Capital Corporation 8.70%
  • Energy Transfer LP 6.70%
  • REX FANG & Innovation Equity Premium Income ETF 26.20%
  • JPMorgan Nasdaq Equity Premium Income ETF 9.40%
  • KraneShares Asia Pacific High Income Bond ETF 15.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 7.80%

The portfolio boasts a strong dividend yield of 7.8%, driven by high-yielding assets such as Ares Capital Corporation and Energy Transfer LP. This income-generating component provides a steady cash flow, appealing to investors seeking regular returns. However, reliance on high dividend yields may expose the portfolio to dividend cuts during economic downturns. To maintain a balance between income and growth, consider diversifying the dividend sources and including assets with a history of stable payouts. This strategy can enhance income stability and support long-term financial goals.

Ongoing product costs Info

  • REX FANG & Innovation Equity Premium Income ETF 0.65%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • KraneShares Asia Pacific High Income Bond ETF 0.69%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.21%

The portfolio's total expense ratio (TER) is 0.21%, indicating efficient cost management. Low costs contribute to higher net returns, making it a crucial factor in portfolio performance. While some ETFs have higher expense ratios, the overall cost remains competitive. Keeping investment costs low is essential for maximizing returns over time. To maintain cost efficiency, regularly review the expense ratios of all holdings and consider replacing higher-cost assets with more cost-effective alternatives. This approach can help preserve returns and support the portfolio's overall performance.

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