Growth-Oriented Portfolio with Strong Diversification and Moderate Risk for Long-Term Investors

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

Growth Investors

This portfolio suits an investor focused on long-term growth, willing to accept moderate risk for potentially higher returns. Ideal for those with a long investment horizon, it offers broad diversification across sectors and geographies, though heavily weighted towards equities. The investor should be comfortable with market volatility and have a higher risk tolerance, understanding that while substantial gains are possible, significant drawdowns can occur. This investor values growth over income, prioritizing capital appreciation and strategic diversification to achieve financial objectives.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    40.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    20.00%
  • Spear Alpha ETF
    SPRX - US53656F3837
    20.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%

The portfolio is composed of four ETFs, with a strong focus on equities. The Vanguard S&P 500 ETF holds the largest share at 40%, providing broad exposure to large-cap U.S. stocks. The Avantis U.S. Small Cap Value ETF and Spear Alpha ETF each make up 20%, adding diversity with small-cap and thematic investments. The remaining 20% is allocated to the Vanguard Total International Stock Index Fund ETF, offering global diversification. This composition reflects a growth-oriented strategy, emphasizing a mix of large and small-cap stocks across domestic and international markets.

Growth Info

Historically, the portfolio has shown solid performance with a compound annual growth rate (CAGR) of 12.22%. This indicates strong growth over time, with the potential for significant returns. However, the maximum drawdown of -28.09% highlights the risk involved, as the portfolio can experience substantial declines during market downturns. The fact that 90% of returns were generated in just 10 days suggests that the portfolio is somewhat reliant on short bursts of market activity. This performance history emphasizes the importance of maintaining a long-term perspective to ride out market volatility.

Projection Info

Using a Monte Carlo simulation, we projected future performance based on 1,000 scenarios with a hypothetical initial investment. This model suggests a wide range of possible outcomes, with a 5th percentile return of -32.34% and a 67th percentile return of 478.52%. The median (50th percentile) projects a growth of 267.11%. With 887 simulations showing positive returns, the annualized return across all simulations is 12.81%. This forward-looking analysis underscores both the potential for substantial growth and the inherent risks, reinforcing the need for risk tolerance and long-term commitment.

Asset classes

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is heavily weighted towards stocks, with 99.64% in equities. This high equity exposure aligns with a growth-oriented strategy, which typically seeks higher returns through capital appreciation. The minimal allocation to cash and other asset classes suggests limited liquidity and lower diversification across asset types. While this can enhance returns during bullish markets, it also increases vulnerability during downturns. To mitigate risk, consider incorporating a small portion of fixed-income assets, like bonds, to provide stability and income, especially if market conditions become volatile.

Sectors

  • Technology
    34%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    7%
  • Energy
    6%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation is diverse, with a significant concentration in Technology at 33.59%, followed by Financial Services and Consumer Cyclicals. This sector mix reflects a focus on growth industries, which can drive substantial returns in a strong market environment. However, the heavy reliance on Technology could lead to increased volatility, given its cyclical nature. Balancing the portfolio by increasing exposure to defensive sectors, such as Consumer Defensive and Utilities, may help stabilize returns during economic downturns. This approach can reduce sector-specific risks while maintaining growth potential.

Regions

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly focused on North America, accounting for 80.89% of the allocation. This strong domestic bias provides familiarity and stability but limits exposure to international growth opportunities. The remaining 19.11% is spread across Europe, Asia, and other regions, offering some diversification. To enhance global exposure, consider increasing the allocation to emerging markets, which can provide access to faster-growing economies and potential higher returns. Balancing geographic allocation can help mitigate regional risks and capitalize on diverse economic cycles.

Dividends

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.36%

The portfolio has a modest total dividend yield of 1.36%, with contributions from the Avantis U.S. Small Cap Value ETF and the Vanguard S&P 500 ETF. The Vanguard Total International Stock Index Fund ETF offers the highest yield at 2.9%, providing some income to balance growth objectives. While dividends can provide a steady income stream, the portfolio's primary focus remains on capital appreciation. To increase income potential, consider reallocating a portion of the assets to higher-yielding investments, while maintaining a balance with growth-oriented holdings.

Ongoing product costs

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Spear Alpha ETF 0.75%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.23%

The portfolio's total expense ratio (TER) stands at 0.23%, which is relatively low and reflects cost-efficient management. The Vanguard S&P 500 ETF offers the lowest cost at 0.03%, while the Spear Alpha ETF incurs the highest at 0.75%. Keeping costs low is crucial for maximizing net returns over time. High costs can erode gains, so it's essential to continuously monitor and compare expense ratios. Consider rebalancing towards lower-cost options if necessary, while ensuring that the portfolio's overall strategy and risk profile remain aligned with long-term investment goals.

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 optimization chart suggests room for improvement by moving along the efficient frontier. For those seeking higher returns, increasing the allocation to riskier assets can potentially boost performance, though it comes with increased volatility. Conversely, a more conservative approach could involve adding bonds or other low-risk assets to reduce risk and stabilize returns. Before optimizing, ensure the portfolio aligns with personal risk tolerance and investment goals. Balancing risk and return is key to achieving a well-rounded, efficient portfolio that meets long-term financial objectives.

What next?

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.